Buying Investment PropertyWhen Should You Remortgage to Buy Another Property in Real Estate Investing? by Ahmad Shukri May 16, 2018May 7, 2018 by Ahmad Shukri May 16, 2018May 7, 2018After finalizing the purchase of your first real estate property, any real estate investor would feel proud of that first step into financial security. Most successful real estate investors will start to think of the next opportunity to take. As both investment and housing loans have become more and more difficult to attain, homeowners and real estate investors look into their ability to remortgage to buy another property.So, what does remortgaging entail?Remortgaging is the process of paying off a current mortgage loan through taking another mortgage using the same property as collateral. Homeowners and real estate investors may choose to remortgage for different reasons; the most popular reasons for remortgaging are reducing the monthly loan repayment amount, raising capital and buying rental properties.When real estate investors resort to remortgaging, it is typically a method for financing investment properties. The most important aspect of buying an investment property is the financial aspect. Homeowners and real estate investors must find the right timing and the right rates when trying to remortgage to buy another property.Related: What are Options for Investment Property Mortgage Loans?What are the right circumstances for you to remortgage to buy another property?When you find the right mortgage ratesInvestment property mortgage rates fluctuate from a year to another and from one vendor to another. When looking to remortgage to buy another property, it is highly recommended to spread out and look for as many lenders available in the market and choose the most competitive rates. This can save real estate investors and homeowners a bundle when financing investment properties.Finding the right mortgage rates can help reduce your monthly payments and the overall accumulated interest figure.When you have high equity in your propertyIf you’re trying to remortgage to buy another property, look into your property’s equity as it is the main determinant of your remortgage application. In investment property financing, equity is the amount or percentage you own against your liabilities on the said property. A home equity can be calculated by subtracting your mortgage balance from your property’s current market value. Note that your property’s equity percentage can fluctuate as real estate prices drop or rise.Buying an investment property through refinancing or remortgaging can be done if you have equity in your current property equal or more than 25% of the property’s overall value. So, make sure to calculate the equity and find lenders that can accept your percentage.Related: What You Need to Know about Real Estate EquityWhen you can take on another mortgageIf a real estate investor or a homeowner wishes to refinance or remortgage to buy another property, he/she is to expect to go through the same procedure they went through the first time around. The process is quite similar to taking a mortgage loan. The lender will assess your income and obligations and factor in any debts or monthly payments you have in order to come up with your disposable income.Making money in real estate can be done if a real estate investor chooses to remortgage to buy another property, but you must keep a sharp eye on the details, assess your situation and estimate what monthly payments you can commit to.Related: Investment Property Loan Providers: What are Your Best Options?The downside of remortgagingRemortgage to buy another property is one of the popular investment strategies that most successful real estate investors recommend. This can work in many scenarios for real estate investors and homeowners alike. However, making money in real estate requires planning and thorough searching for the next proper move.If you do proper research, you will find many online forums with titles that entice you into real estate investing, such as “how to buy an investment property with little or no money down.” This can be attainable for many real estate investors, but it’s important not to forget the details and establish a better overall picture. This is where the role of creative real estate investing begins. The real estate investor should think three steps ahead and keep in mind different investment strategies that he/she might be able to employ in the future whether it’s a buy and hold or a fix-and-flip or any other investment strategy. These are some of the difficulties and disadvantages you can expect if you try to remortgage to buy another property:By remortgaging, you are extending the duration of your loan by taking another to cover for it. While it may be financially smart to refinance a current mortgage, in many cases a real estate investor is better off by staying in his/her current loan plan.There are closing fees when you remortgage which can just add cost and belittle benefit.It’s a time-consuming process; it might take weeks or months to get approved for a remortgage.If you have run into financial troubles since your last loan or mortgage, including not being able to make payments on your first mortgage or having many delayed payments in the past couple of years, you may run into issues. This can have a negative effect on your credit score and creditors might have to evaluate your credit situation before being able to apply for a loan.Related: Questions to Answer Before Buying an Investment PropertyTo concludeInvesting in real estate requires a whole lot of savvy and a bundle of hustle. A real estate investor needs to be able to do creative real estate investing in order to implement investment strategies that might bring him/her wealth. If real estate investors wish to remortgage to buy another property, it is recommended that they do a lot of research to know exactly what they are getting into. It also helps to keep an open dialogue with your bank to figure out what you can do to find the best financing option in order to make the best real estate investments you can.To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here. Start Your Investment Property Search! START FREE TRIAL 0FacebookTwitterGoogle +PinterestLinkedin Ahmad ShukriAhmad is Content Writer at Mashvisor with a degree in marketing. He enjoys writing about everything related to real estate and especially the top markets for investment properties. 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