#AskBP 076: When Is It Smart to Refinance a Property and How Does It Affect My Credit Score?

Expertise: Landlording & Rental Properties, Personal Development, Real Estate News & Commentary, Real Estate Investing Basics, Business Management, Flipping Houses, Mortgages & Creative Financing, Real Estate Deal Analysis & Advice, Real Estate Wholesaling, Personal Finance, Real Estate Marketing, AskBP
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When Is It Smart to Refinance a Property and How Does It Affect My Credit Score?

Rates are predicted to be going up, so taking advantage of today’s low rates can only help your bottom line. On this episode of the #AskBP Podcast, Mindy Jensen talks about refinancing your mortgage, and how it can affect your credit score.

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Brandon Turner is an active real estate investor, entrepreneur, writer, and co-host of the BiggerPockets Podcast. He began buying rental properties and flipping houses at age 21, discovering he didn’t need to work 40 years at a corporate job to have “the good life.” Today, with nearly 100 rental units and dozens of rehabs under his belt, he continues to invest in real estate while also showing others the power, and impact, of financial freedom. His writings have been featured on,,, Money Magazine, and numerous other publications across the web and in print media. He is the author of The Book on Investing in Real Estate with No (and Low) Money Down, The Book on Rental Property Investing, and co-author of The Book on Managing Rental Properties, which he wrote alongside his wife, Heather, and How to Invest in Real Estate, which he wrote alongside Joshua Dorkin. A life-long adventurer, Brandon (along with Heather and daughter Rosie) splits his time between his home in Washington State and various destinations around the globe.

    Kyle Hipp Investor from Appleton, Wisconsin
    Replied about 4 years ago
    I might be missing something but I don’t believe that a cash out mortgage should affect your credit utilization rate as it is not revolving debt. If my original note was for $80,000 on a $100,000 property, then 5 years later I refinance with cash out at $100,000 but the property is now worth $150,000 because of value added improvements and/or appreciation, my loan to value is actually lower even though I did a cashout. However even in that case I don’t know that the specifics of loan to value are reported either. Any clarifications on that if I missed something?
    Mindy Jensen BiggerPockets Community Manager from Longmont, CO
    Replied about 4 years ago
    Thanks Kyle. I just re-watched and I mis-spoke in the video. A cash-out mortgage will affect your debt-to-income ratio rather than your credit utilization. Thanks for the catch. I don’t believe the loan to value shows up on the credit report, but the new mortgage amount does.
    Alma Mills Real Estate Investor from Los Angeles, California
    Replied about 4 years ago
    I understand that your monthly payment may go down if you refinance but it may be unwise to do so, especially if you have been paying down the note for many years. Each time you do a regular 30 year refinance you will be pushing back the final payoff date and as your payment is heavy on interest in the early years refinancing an older mortgage will cost you money over the long run.
    Mindy Jensen BiggerPockets Community Manager from Longmont, CO
    Replied about 4 years ago
    Alma, this is a great point. Thanks for sharing.