Refinance Your Investment Property Mortgages

by Jamie K.
(Portland, OR)

As a former bank manager, I see so many landlords and investors who clean forget about their investment property mortgages once they are approved for a mortgage loan. In this case, they may well be missing out on a golden opportunity to reduce their mortgage rates by refinancing.

If the current mortgage rates dips 2 to 3 percent below the interest rates that you are paying, then it's time to sit up and take a closer look at the possibility of refinancing.

Firstly watch out for any hefty prepayment penalties that may be imposed by your existing lender. Prepayment penalties can cost you up to 6 months of interest or 20 percent of the remaining loan balance.

The longer you have been paying off your existing investment property mortgages, the smaller your prepayment penalties will be. If you have been servicing your mortgage for more than 5 years, there should be no prepayment penalties weighing you down.

To save money on refinancing, you can try approaching your existing lender and ask them for a streamlined or modified mortgage. In plain English, this simply means asking them to lower their mortgage rates in order to keep you as their customer. There is usually a charge of a few hundred dollars but it beats forking out thousands for prepayment penalties.