Board Topic: property refinance
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property refinance

Posted by: scott Sep 23 2003, 01:41 PM
I purchased a property in 1997 to use as an office etc. for my business. It is a rural area with a house and 2 acres. My father paid cash for the property and I have a loan agreement with him at 9.5% intrest on 20 years. I would like to rent the house out because it is to large for my office needs and build another structure for my office. what would be the best way to refinance the property and get some money for improvements on the house. I know this is limited info but it may get us started.
thanks.

Posted by: loanuniverse Sep 23 2003, 02:48 PM
The first thing that comes to mind when you said house is a regular residential mortgage. If you are currently using the property as your home then you can treat this as a refinancing of your primary residence. Without going into much detail, this is one of the cheapest sources of financing out there. However, other factors come into account when you mention that you are using it as your office and that you are planning to rent the house.

Frankly, you are right when you mention that this is limited information. You need to visit a lending officer in your neighborhood bank and talk to him/her about your situation and your plans. Although I am not a residential lender, I would imagine that the questions that will probably be asked of you or things that will be determined will be similar to the following:

a- How much money are you looking for?

b- How much is the property worth?

c- How much do you make? What is the source? Is it documentable? Is it enough to repay the requested loan?

d- If you are looking to treat this as a rental property loan, what are comparable rents in the area?

Personally, I think your best bet would be to try to get a residential loan, perform the improvements and then if you are still interested rent it out. Whether or not you can get one will be determined by talking to a lending officer in your area {or two officers in two different banks, just like everything else… it pays to shop around}

Hope this helps.

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