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I bought an investment property somewhere in the Northeast in 2004. I took out a 80/20 loan and the interest rates on both loans is quite high. Both loans are 7 year ARMs.
Worse, I believe that because of the recent pull back in prices, I might owe more than the house is worth; maybe $ 30,000 more. I don’t know for sure. I am also collecting rent which pays the mortgage for now but anyone who has dealt with tenants knows how painful it is sometimes.
I have been thinking about one of these options:
1. Put the house on the market and take a loss
2. Stay put and see what happens in the next year or so
3. Refinance to get one loan with a lower rate
Help!

6 Thoughts on Investment Property?
  1. Reply
    daniel r
    February 2, 2014 at 3:23 pm

    try for a new loan, but do not count on it if you did 100% financing. best to tough it out til 08. prices should be rebounding by then in most areas. as long as your rent payments are covering the mortgage, i would not worry til your ARM’s are due to adjust.

  2. Reply
    dnelak
    February 2, 2014 at 3:44 pm

    It seems like you should refinance the home. Rates have gone down again, and I think you should get a fixed rate for 30 years. This way the house can pay for itself while making your equity. I know that the prices have gone down in the last year, but the market should eventually pic up, and your house will be back in the possitive. Right now you are paying too much for the house in an ARM, try for a fixed. Good luck.

  3. Reply
    kishaloy_bhowmick
    February 2, 2014 at 3:54 pm

    Hi there…
    Have a new loan .Just get it refianced .I am a loan officer and we do provide loans for all kind of cases and credit is never a problem for us . For more information write to [email protected] or call 480.751.4125 and ask for kish .or you can directly call my boss jerry at 480.751.0293 and say that kish has given his number to you …..
    regards
    kish

  4. Reply
    Scott B
    February 2, 2014 at 4:14 pm

    First I would have an appraisal and/or Comparative Market analysis done. This will let you know what you home should sell for/what it is worth in the eyes of the mortgage company. If it turns out that you would be selling it for a loss, then I would consider refinancing (if the value allows for it), or stay put until your market rebounds. Since the rent covers your mortgage, you are in a good position to let it ride.

  5. Reply
    satarnag
    February 2, 2014 at 5:13 pm

    Daniel’s response was great.

    Ride it out until the market rebounds in a few years. Chances are, you will not be able to get the rates you got at 2004 so I wouldn’t refinance either. As far as selling and taking a loss, that doesn’t make sense if you’re not negative cash flowing or unable to keep up with the mortgage payments.

    Regards

  6. Reply
    ScottMortgageExpert
    February 2, 2014 at 5:27 pm

    Why hasn’t anyone said yes that you cant refinance unless you bring that $ 30,000 to the table at closing! You can not refinance over 100% loan to value. In fact, 100% refinance on an investment property is not an easy loan to find. You are going to just have to sit back and wait for a buyer at the price you need or close to it or just keep collecting rent and making payments. Refinancing is not an option if you are not going to bring money to the table. I bet your rate now would be higher, not lower than your original rate.

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