Refinancing an investment property

[Anonymous]

I'm looking to refinance our rental property which used to be our primary residence. I've been thinking about contacting my lender to find out if I can do a simple refi with them, but does this get complicated now that the house is an investment property? I understand that rates will be somewhat higher for a rental property and there were no restrictions in the original loan that we got when we lived in the house that prevents the property from being rented. Has anybody done this?

Thanks.

[Anonymous]

We're looking at doing this also. Can't do a simple refi since it's a different type of loan.

[Anonymous]

No such thing as a "simple refi" (unless streamline VA, FHA, or Home Affordable Refi Program HARP), any refinance is the same process as a purchase (underwriting, appraisal, etc). With the scenario you lay out, it's rather simple. If you recently started renting out the property and the rental income is not listed on your tax returns, then you'd have to prove that you have been receiving the rent from the new tenant in order to use the payment to offset the debt for qualification purposes. If it doesn't matter (ie, you have enough income to offset all your debt including your new housing payment), then you're good to go. If you need the rental income to offset your debt ratio and don't have the income on your taxes or can't show the new rental income received, the property has to have 70-80% equity (depending on the loan type you go with).

I know I've said a lot, but again, it's a rather seemless process. Expect it to take 30-45 days to close.

[Anonymous]

We did it together with a refi on our principal home. Both were easy and not much difference except the rate was a bit higher on the rental.

[Anonymous]

This kind of a refi is just as easy as any other. Only difference is that you'll likely be required to have more money down than a primary residence loan (which you may already have equity-wise) and the rate is like 1/4% higher. Easy. My favorite lender is www.jonathanokun.com. He's awesome and is happy to explain everything in detail. Can even apply there on the website for free - takes just a few minutes.