Jumbo mortgage investment property - Can I refinance with 20% equity?

There is a very specific method of calculating rental income for qualifying and you shouldn't be hit twice for the property expenses. Have you seen the spreadsheet as to how they are calculating it? However, you have multiple issues going on, the first being the amount of equity in the property since it's now consider investment. Generally, options open up if you have 30%+ equity in the property. Secondly, it seems that even if the DTI ratios can be resolved, they may be too high for Jumbo lenders who typically like to see them no higher than 43%

Lets look at this glass half full! you have a great rate have you been paying only the interest on the loan? Hard to imagine you have that many expenses eating up 80K? I'm assuming you wish to retain the property I would suggest you take that income and begin to pay the principal on this loan, pay it down so in the event rates rise it may very well be on a lower balance. Creative way of dealing with the principal reduction calculate the balance with a fixed rate of 7% pay that amount as a principal reduction payment. If you can do more you should if not you can always sell it.Good Luck.

There are investment items called SWAPS, which can be used a hedge against rising interest rates. These are sold by investment brokers. They are in effect an insurance policy to protect you, by paying you a premium if interest rates rise. If there is not a major increase in interest rates, you just "wasted" your investment.I do not recommend this tool, as you can raise rental income when and if inflation increases.

HARP refi's only apply to conforming loan limits ($417K), so even if Fannie or Freddie owned your loan, you still wouldn't be able to refinance using HARP. First let me say that you will not be able to refinance a jumbo investment unless you have a minimum of 30% equity, and your adjusted gross income must support all your debt and leave you within the allowable debt to income ratio defined by the lender (typically 43%).. if you cannot meet these eligibility requirements, then you wont obtain financing.. There are certain lenders who will allow regular deductions from a large cash asset account to be considered for income, but it must have the ability to continue for at least 3 years. Example:.. you have a professionally managed brokerage account with $360,000 in it.. you set up a regular withdrawal of $10,000 per month. Since this would continue for at least 36 months, then the lender can add $10,000 to your monthly income for debt purposes.. not every lender allows this type of asset depletion income, so you would need to shop around. If you don't have the necessary funds, and you don't have enough AGI to qualify, then your pretty much stuck in your loan. If rates go up substantially and the property is no longer affordable, you might want to consider selling it. But understand that the economy is still stalled, and long term outlook for interest rates are stable.. you should be ok for the next few years.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com