Hello all.
I was wondering what is a good amount of time for seasoning of a loan. I have had my current loan on my rental property for 30 months on a 60 month loan. Because rates are low, I am thinking about refinancing it. What do you guys think?
Larry
Are you speaking about seasoning for qualifying for a new refi or in general for how long you should hold the loan before refinancing.
For qualification you typically need to have been on title for 6 months to refinance.
The rate, closing cost, savings, and length of time you plan to keep the new loan should be the main factors that determine if a refinance should be done. For example, if you rate is dropping by .5% and you save $300 per month, then you need to figure out how many months it would take to make the closing cost. If estimated at $3,000 then it would take you about 10 months to make up that cost. In this scenario you’d come out ahead if keeping that new loan for at least 12 months.