Refinancing Investment Property ARM Home Loans

By Corey T Bruhn

Rental properties have been used by investors as a sort of safe haven against the ups and downs of the stock market. recently many investors took advantage of adjustable rate mortgages or the more exotic option ARM loan in order to finance their investments.

Faced with resetting payments and rising rates many of these types of investors have tried to refinance and found that is now harder then ever to refinance adjustable rate mortgage on rental property that they own.

Why Investors May Not Be Able To Refinance Their ARM Home Loans

Reduced Property Values- Many people jumped into the rental property market when times were good and creative financing programs allowed them to buy second or even third homes with 100% financing and little proof of income. But now as banks have tightened up and property values have dropped many investors are finding they owe more then the house is worth and they can at best get a loan for 75% of the value of the home.

Not Enough Income- Because many of these loans were purchased with no doc or stated loans they are very hard for the owners to refinance using their actual incomes. Stated loan,no doc loans and high DTI loans are long gone so if you need this type financing and do not make enough to debt ratio properly you are in big trouble.

What Can You Do If You Are Unable To Refinance

The best thing that you can do as a property owner who is in trouble is to call your lender and try and work out a reduced interest rate or payment. Many times if you were a great customer before the lenders will change your loan to a fixed rate and set the rate to your initial rate or one that reflects the current going rate in the market place