We turned our second home into a rental property, and now want to refinance. Do we get a conventional refinance or need a non-o
A residential home is purchased as a second home then is subsequently converted to a rental property. If that property were to be refinanced now would this require a investment property loan (I think that's what you call it for a rental home) or could it still be refinanced as a second home since that is the existing mortgage?
If you show rental income or expenses on a Schedule E for that property, then the lender will consider the property a non-owner occupied property, and will require you to get a non-owner occupied loan, also known as an investment loan.
The term "non-owner occupied" is applied to a single-family home that is rented to tenants. The description is important from a mortgage standpoint, because lenders perceive a non-owner occupied property mortgage as being more risky than an owner-occupied property mortgage.
If get a free, online mortgage quotes, visit the Bills.com Free Mortgage Quote page.
I hope this information helps you Find. Learn & Save.
Best,
Bill
The mortgage market: what's new?
Mortgage rate fluctuations should come as no surprise. If you are buying a home or refinancing your existing mortgage, it is important to stay informed about the current mortgage rates.
Mortgage rates April 10, 2024
According to Freddie Mac, the 30-year mortgage rate for the week of April 10, 2024 stands at 6.88%. This reflects a 6 basis points increase from the previous week's rate.
Note: A basis point is equal to one-hundredth of one percent (0.01%). In numerical terms, if the mortgage rate changes by 20 basis points, it means the rate has changed by 0.20%.
Additionally, Freddie Mac reports that the 15-year mortgage rate for April 10, 2024 is 6.16%, indicating a 10 basis points increase from last week’s rates.
Understanding the impact of mortgage rates on your finances
When it comes to determining your monthly payment, mortgage rates are a key factor to consider. Here are the avergage interest rates (APR) for April 14, 2024 based on Zillow data for borrowers with a high credit score (680-740) in the United States:
- 30-year conventional loan is 7.09%
- 15-year conventional loan is 6.29%
Based on the provided rates, a $279,082 30-year mortgage would result in a monthly payment of $1,874. Alternatively, a 15-year mortgage would require a monthly payment of around $2,399.
Simplify your mortgage journey: Shop around and get pre-approved today!
To make the home-buying or refinancing process a breeze, we highly recommend shopping around for mortgages and getting pre-approved. So, why not Check Out mortgage rates now for the best options available.
