Rental Property Investor · Hollywood, FL · Member since 2014 · 32 posts · 3 votes
Hello,
Will it be difficult to refinance out of a hard money or bridge loan for investment property once small Reno and rental is put in place on property if I already have a pretty hefty mortgage on my primary residence home?
@Justin Tippens It might, but it’s hard to say without getting into the details. Assuming good credit, income, payment history, etc., your debt to income ratio will be a major factor. My advice, if you haven’t already, is to call a bunch of local banks and mortgage companies to see if they do refinances on investments and what they offer. I found that they can really vary from one to another, and some won’t do it at all. Once you’ve found one that has the product you are looking for, have them do a preapproval so you will know for sure. It will be a hard hit on your credit, but I’d rather have that than find out I have money stuck in a property because I can’t get approved for a loan. Hope that helps.
I’ve read over and over and learned all I can. But never much about being able to refinance an investment property out of the hard money or similar loan with an existing mortgage on my primary residence.
@Justin Tippens Good for you and keep learning! To be clear, you absolutely can get a refinance loan if you have a primary mortgage. It’s not the primary mortgage that’s the problem. It’s whether or not your debt to income is ok.
That is going to be the problem. I am a Fire LT here in south Florida but my primary residence mortgage is right at the debt/income limit. My income is stable and decent but factoring in another payment on investment might put me over the top with income-to-debt.
You can always look to getting pre-approved prior to purchasing to see if you can qualify. You can count 75% of rental income towards your purchase as well.
As mentioned there are investor cash flow programs that don't look at your personal DTI's. The rates will be higher with this program, than conventional, but are another option. There are minimum loan amounts with these programs of $75k - $100k.