So we just bought our first rental last summer. We live upstairs and rent out the basement apartment. I've been getting hit up through the mail pretty often by these companies that are saying that because interest rates have dropped they want me to refinance with them at the lower rate and they will pay all associated costs. Obviously a lower rate is better but I'm a bit leery of these kinds of unsolicited deals. My guess is it's worth it for them to pay the costs upfront and then collect interest that they otherwise wouldn't have had.
My question is: Are these kinds of companies/lenders legit and is there any reason I wouldn't want to do this? My rate is 4.5% FYI
A caveat to this is I'm looking into my equity position in my property as I'd like to see if I could use it to get into another property. I know you typically don't have any equity after only a year but the property was listed and appraised as a single family and the previous owners were renting the apartment well below value. We were able to get the rent up and our realtor said once we did that we should look at getting it appraised as a multifamily as the higher rents should support a higher appraisal.
So with that in mind, would it be smart to use one of these companies to refinance if I may end up going to, let's say, my local credit union and taking a second mortgage out on my property to use to finance another one, essentially refinancing twice within a relatively short amount of time?
Any insight would be appreciated.