I am looking to refinance my investment house

[Zeliang Zheng]

Hello, I have a investment house in Rockville MD, and I am looking for cash out refinance. The rates is greater than 6 from traditional bank? Is this worth it? what other options do I have to get more cash for investment?

[Andrew Postell]

@Zeliang Zheng without seeing your profile, credit, LTV, etc. it might be hard to tell if this is a "fair" offer or not. I always suggest speaking with other real estate investors in the area of the property to find good lenders. Other investors have probably done all the hard work of finding good lenders. So #1 - get some good recommendations.  I wrote an entire post on how to find good lenders HERE if you want to read it.

#2 - Term.  It's not just about the rate, right?  So if I give you a 10 year, adjustable rate loan with a 3 year pre-payment penalty and the interest rate is 4% - is that fair?  Your payment would be SKY HIGH, and you wouldn't cash flow, and then you run the risk of the rate changing - but your rate is low!  I always recommend taking a 30 year fixed rate loan.  And there are lots of business/tax reasons to do that.  But make sure you are speaking about the proper TERMS of your loan as well.

#3 - Options? - Your options should be determined on what you are trying to do with that money.  So if you let us know what you were thinking about doing with the money, that might help us recommend some better loan options.  

Hope all of that makes sense.  Thanks!