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.
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I hope this information helps you Find. Learn & Save.
Best,
Bill
The Latest on Mortgage Rates
No surprise that mortgage rates fluctuate. If you are thinking about purchasing a home or maybe considering refinancing your current mortgage, then you want to be up to date on mortgage rates.
Mortgage rates November 8, 2023
According to Freddie Mac, the 30-year mortgage rate for the week of November 8, 2023 stands at 7.50%. This 26 basis points decrease from the previous week's rate.
Additionally, Freddie Mac reports that the 15-year mortgage rate for November 8, 2023 is 6.81%, indicating a 22 basis points decrease from previous week’s rates.
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%.
What does the mortgage rate mean for you?
Mortgage rates play a vital role in determining your monthly payment. Let's take a look at the avergage interest rates (APR) for November 14, 2023 based on Zillow data for borrowers with a high credit score (680-740) in the United States:
- For a 30-year conventional loan, the interest rate is 7.61%.
- If you opt for a 15-year conventional loan, the interest rate stands at 6.74%.
Using the rates mentioned above, a $279,082 30-year-year mortgage would result in a monthly payment of $1,972. On the other hand, a 15-year mortgage would require a monthly payment of approximately $2,468.
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.
