Can I Refinance my rental without owning my own residence?

Question

Hello fellow investors!!

I from Missouri and I live with my mother while starting to invest in real estate. I have one rental property. It has been tough trying to refinance this property the companies do not like the fact that I do not own a residence for myself.

I want to know if there is any other way to get around to successfully refinance without owning my own residence while having a rental.

Thanks

Dana Anghel · Answer

Not owning a primary residence is not a problem. Banks look at investment properties as being a higher risk, so they require you to have more "skin in the game" (meaning equity).

Depending on the number of units of the property, and the type of transaction ("rate and term" or "cash-out"), you will need to prove that you have anywhere from 15-30% equity. You also need to have at least 6 months of reserves (meaning funds to pay the mortgage) and good income.

Another issue that you might have is that some bank won't pay of "hard money loans", like the one you got from your uncle.

When looking for a lender, make sure all the requirements are met: equity, income, reserves and hard money loan financing.

Hopefully you've owned this home for at least 6 months.. it can make a difference if you haven't owned it for long, but are trying to do a cash-out.

Robert Higgins · Answer

Thanks very much for the responses I really appreciate it. The property is paid for I had received a loan from my uncle but I have been trying to refinance ever since to get his money back and get financing so I can move on.

But I will try more banks.Thanks again

Christian Carson · Answer

Find another bank. I've done it several times and never once has the status of my personal residence come up, except when trying to sell me more products.

Matt Devincenzo · Answer

I own several rentals out of state and have never owned a home that I lived in as my primary residence. I have never had any problem with getting a refinance personally, so I'm not sure what the issue for the lender's you've spoken to are.

Jerry W. · Answer

I agree with @Marcus Johnson , having equity, good cash reserves, 20% money for down payment, good debt to income ratios should be enough to get more loans.  Living free with a relative should help debt to income ratios.