How To Refinance Investment Property In Florida

Refinancing your home mortgage in Florida may be a great strategy to obtain a lower interest rate on the mortgage loan, or to borrow extra money to finance property improvements, provide cashflow in other ventures, or pay off existing debt.

In Florida, this strategy can be used not only for residential property, but for investment properties as well. Investment property refinancing offers several advantages, such as making a mortgage loan more manageable and providing funds to improve the property.

In this article, we will provide you a guide on how to refinance investment property in Florida.

Refinancing an Investment Property in Florida- Why Should I Do That?

There are several advantages when you decide to refinance an investment property in Florida. Generally, banks and lenders tend to charge more in interest on investment properties. It happens due to the higher risk associated with investment properties compare to residential properties.

Refinancing an investment property may be a good way to give you access to lower interest rates. This strategy requires a solid approach, nonetheless. Before proceeding to a refinance, you need to compare your current interest rate with offers from other lenders.

Refinancing by changing the length of the property’s mortgage may (or may not) change your interest rate. There are also options for those who want to refinance from an adjustable-rate mortgage to a fixed-rate mortgage.

Other advantages include:

• The possibility to cash out equity.
• Increase your rental income by reforming and upgrading the property.
• Finance other real estate investments.
• Get funds to do pay off medical debt.
• Boost retirement savings.

How to Refinance Investment Property in Florida – Step-by-Step

In the following topics, we compiled the standard steps you can expect when you opt to refinance your investment property in Florida. Before taking any action, we recommend you seek the guidance of an expert business attorney throughout the process.

Gathering the Necessary Documents

First, you will need to reunite and organize the necessary documents to start the refinancing process. Gathering the due documentation before applying for a refinance will help to speed up the procedures.

Typically, the bank or lender responsible for your current mortgage will require:

• Proof of income.
• Proof of homeowner’s insurance.
• Copies of W-2 forms.
• Copy of title insurance.
• Copies of the asset’s information.

Also, we recommend you keep more than one copy of each document available in case you need to resend any of them.

Applying For a Refinance

Once you have the necessary documentation organized properly, you can apply for a refinance by contacting your lender to begin the application process.

Commonly, refinancing your home mortgage is less complicated than buying a home. At this phase, your lender will ask you to complete an application, submit your documents, and respond to some inquiries.

Locking Your Mortgage Rate

This is a crucial phase for those who are refinancing to get better interest rates in their mortgage loans. Regardless, you must look closely and pay attention to your decision at this step.

Typically, the borrower has the option to lock down the interest rate as the lender approves his refinancing application. Locking down the interest rate gives the borrower the necessary time to read the terms for refinancing without being exposed to liabilities associated with changes in interest rates.

In this sense, the location and type of the loan may play a role in how long a rate lock lasts. Generally, rate locks last between 15 to 60 days, also depending on the lender.

In case the borrower approves the current rate, they must lock it through the lender rapidly. Otherwise, it is possible to “float” the interest rate and proceed with the loan. Remember that, once you opt for “float”, your interest rate will be exposed to market changes that will affect it directly, causing it to go up or down depending on the occasion.

Advancing to Underwriting

Once you lock your rate, the lender will advance with the process and proceed to the underwriting procedure. At this phase, the lender will verify the borrower’s income, assets, and the property’s condition.

Thus, the lender orders an appraisal to determine the fair market value of a property. Additionally, an appraisal allows the lender to know if the agreed price paid for a property is either fair or not.

In case your investment property is scheduled to be appraised, we recommend you make sure it is looking as best as possible before the appraiser arrives. It is highly recommended that you put together a list of upgrades made to the property.

Proceeding to the Closing

Once the underwriting was concluded, it is time to advance and close on the new loan. This process tends to be faster when you compare it to a home purchase, for example.

At this phase, the lender will give you a Closing Disclosure at least three days before the closing meeting. This document has the purpose to cover details regarding the new loan, including any closing costs and fees that need to be paid.

The closing meeting will be the moment for signing the necessary documents and ask any questions that remained about the loan. Once this procedure is concluded, the refinance was done successfully.

In case the lender owes the borrower any amount of money, such as a cash-out refinance, the due amount will be available in the borrower’s bank account within a few days.

Investment Property in Florida – We Can Help You to Refinance

Refinancing an investment property in Florida can be a complex process, involving the assessment of various factors and requiring a professional approach.

Waste no time with uncertainty. Get in touch with Jurado & Farshchian, P.L. today by calling (305) 921-0440 or emailing [email protected] to schedule a consultation.