Rental Property Investor · New York, NY · Member since 2011 · 101 posts · 10 votes
Hello Community,
I'm seeking guidance on refinancing a property with an owner-financed loan that's nearing its maturity. Despite the loan balance being relatively small at just over $100,000, the property's value has significantly appreciated to over $500,000. I aim to refinance the loan under conventional investment terms to avoid the high interest rates associated with hard money loans.
With an excellent credit score, securing a loan shouldn't be a challenge. However, I'm concerned about the high monthly payments that come with shorter loan terms. I would greatly appreciate any suggestions or advice on how to refinance this property with a more manageable payment structure.
Thank you in advance for your expertise and guidance.
Is this a rental property or a primary? You could get a 30 year fixed mortgage and lower your LTV so that your monthly payment is manageable. If it's a rental, you can structure the loan so that the monthly PI is lower than the rent income.
@Raza Rizvi You should be able to refi the $100k at a standard 30 year term, and have very reasonable payments. Are you running into any issues with getting a conventional 30 year mortgage for an investment property?
@Raza Rizvi yeah, who is saying you have to take a shorter term? That's not the case. Maybe the lender you are speaking with doesn't offer 30 year loans? But those are available. Here to help if you need anything.
@Raza Rizvi ohhhh, ok, then yes, on commercial properties you will have 20 year, adjustable rate loans. That's pretty normal. If you have ANY lender that will finance a $100k loan on commercial, then take it. That's super small in the commercial world so that might be your ONLY option.
I'm seeking guidance on refinancing a property with an owner-financed loan that's nearing its maturity. Despite the loan balance being relatively small at just over $100,000, the property's value has significantly appreciated to over $500,000. I aim to refinance the loan under conventional investment terms to avoid the high interest rates associated with hard money loans.
With an excellent credit score, securing a loan shouldn't be a challenge. However, I'm concerned about the high monthly payments that come with shorter loan terms. I would greatly appreciate any suggestions or advice on how to refinance this property with a more manageable payment structure.
Thank you in advance for your expertise and guidance.
Hey Raza, taking out the seller note shouldn't be a problem. How long have you had it? If more than 1 year you should be able to go off the new appraised value and cashout refi or rate/term if wanting a lower rate, 30 year terms should be readily available so don't have to worry about short terms. IO also is an option if concerned about monthly cash flow.