COVID-19 has affected everyone in some way and I have to believe most of these experiences have been memorable for all the wrong reasons.
For real estate investors, many challenges have arisen from ensuring the health and safety of your tenants to negotiating rent concessions with tenants who were forced to shut down businesses or lost their jobs.
One silver lining that has resulted is a drop in mortgage rates to historic lows. I myself just refinanced my mortgage down to 2.75%. Some analyst are predicting rates to go even lower. For those who want to track rates, the average mortgage rate can be found here.
If you own a single family investment property with a conventional mortgage, this is a no brainer. Take advantage of these historic rates. For commercial and multi-family, you’ll need to verify lending terms to see if prepayment penalties apply, and for jumbo mortgages it will most likely depend on your banking relationship and credit profile.
Assuming it’s possible to refinance, you can estimate your savings by using this handy mortgage calculator.
During times like these I’m reminded of the Chinese character for “CRISIS”, which is comprised of two characters, one representing “danger” and the other character “opportunity”.
Lowering your monthly obligations and increasing your cash flow is not only an opportunity but will also add resilience to your investment in these uncertain times.