Author Topic: Can you refinance rentals when retired?  (Read 905 times)

Bearded Man

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Can you refinance rentals when retired?
« on: October 30, 2015, 02:53:59 PM »
Say you retire in your 40's and live off your investments. Can you borrow against your house as the value rises with no traditional job income?

DaveR

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Re: Can you refinance rentals when retired?
« Reply #1 on: October 30, 2015, 05:39:23 PM »
Can you... yes. Will the robo-underwriter at your local big bank think beyond no income = no loan? Doubtful. You'll likely have better luck with a smaller bank or credit union that (hopefully) cares a bit more about having your business. But it still may be tough.

Rentals are higher risk, so you can still get mortgages for them, just at higher rates. The other thing is structure. Are your rentals under the umbrella of a business? I.e. are "you" refinancing, or is "My Rental Biz, LLC." A properly structured business with operating reserves and all that helps give banks a warm fuzzy.

See: http://www.financialsamurai.com/why-are-rental-property-mortgages-more-expensive-than-primary-home-mortgages/

Admittedly, I haven't done a post-FIRE rental refi. I'm sure there are others around here with good insights.

undercover

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Re: Can you refinance rentals when retired?
« Reply #2 on: October 30, 2015, 07:09:28 PM »
Not sure about a refinance, but I know a bank will conventionally lend based on rental income + dividend/stock income. They want to see 2 years of rental income. Just have to have your tax returns ready. So I don't see why a refinance would be an issue. At any rate, I think you mean a HELOC rather than actually refinancing the property, though I'm sure the same requirements still apply.