How to Refinance a Nonprimary Residence
- 1). Check with your existing mortgage lender about refinancing opportunities. See what their guidelines are and what kind of rate they can offer you. Having a well-established payment history and good credit with one particular lender leads to better chances of approval. If your second home or vacation home is already financed through Freddie Mac or Fannie Mae and your payments are current, check with your lender to see if your nonprimary residence is eligible for refinancing under the no equity mortgage refinance program that was introduced in 2009.
- 2). Shop other mortgage lenders to find out what types of refinancing programs they have available for nonprimary residences. Not all mortgage lenders offer these programs, and those that do have very stringent guidelines for qualifying. Compare interest rates among those that do offer refinancing programs for nonprimary residences to find the best rate and save money.
- 3). Complete a loan application for refinancing your existing mortgage on your nonprimary residence with the lender that best meets your needs. Be honest about your situation and the use of the property that you are wanting to refinance. Lenders tend to view nonprimary residences that are used as second homes and vacation homes as less risky than rental homes or investment property, but lying about the use of the property or its occupancy to a lender constitutes mortgage fraud and can lead to criminal prosecution.
- 4). Don't give up hope if your application to refinance your nonprimary residence is initially denied by one lender. Plenty of lenders are eager to do business with those who have a good credit history and a home that shows good potential for increased property value. Try another lender that also offers a decent interest rate and has a reliable reputation. Applying through several lenders at one time, however, can harm your credit and give the impression that you are "shopping for credit," so limit your attempts to one or two lenders.
- 5). Talk to a certified mortgage planning specialist about other options that may be available to you. If you have been denied a request to refinance a nonprimary residence such as a second home, vacation home or investment property, these types of financial planners can look at your current situation, suggest a better course of action, and also refer you to lenders that may be better able to assist you. Frequently, certified mortgage planning specialists work directly with a number of mortgage lenders and banks and know which lenders offer the best rates in the industry.
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