What's The Next Step...Before Refinancing?

Question

So I'd like to say I'm following the BRRRR method, but I'm currently done the following, Buy, Rehab, Rent, however, I've never refinanced a home, so I'm not sure what the process flow typically looks like other than some minor details here and there.

I have not had my property re-appraised since I purchased it, and did not know if I need to pay for that to be done before contacting my mortgage company that I want to refinance, or if the mortgage company typically does all of that automatically when I ask to refinance?

Overall, I'm just trying to understand the typical process when it is time for the refinancing part.

Cameron Tope · Answer

@Craig Sloan has some solid advice! You want to be honest with the loan officer because some lenders have a seasoning period or other qualifications that may inhibit you from being able to refinance. You want to know this stuff ahead of time.

The only other thing you need to have is a plan in the event your property appraises for more or less than you thought. Do you still want to go through with the refinance? Do you have money to bring to the table? Would you rather sell it?

Having a solid plan with some criteria before you refinance will help you make the decision.

Best of luck!

Craig Sloan · Answer

I would wait to have the property re-appraised as part of the refi.  If you have it done on your own the bank may require their own appraisal and then you'll end up paying for 2.  Do you have a regular bank you work with?  If so, I would speak with your loan officer and see what they have to offer.  Just to keep them honest I would also check with a few other banks just to compare rates and terms.  If you don't have a regular bank this may be the time to find one.  I would talk to several lenders focusing on smaller local banks that are able provide a more personal level of service.  Let them know what your future plans are.  They may provide more favorable terms if they know that you are a client that may give them regular business.