DSCR cash-out refinance
A DSCR cash-out refinance replaces the loan on a rental you own with a larger one and pays you the difference. The new, bigger payment has to be covered by the property's rent, so the ratio after the refinance, not before, decides how much equity you can take.
Who is this loan a good fit for?
- Owners of a leased rental with meaningful equity who want funds for another investment property
- Investors who bought with cash and want to recover some of it
- Owners who renovated a property and want to borrow against its new value once seasoned
- Portfolios where the rent has grown since the original loan
Why cash-out lowers the ratio
More cash out means a larger loan, a larger payment and a lower DSCR. If the ratio gets too thin, the amount you can take out shrinks. Try the target-ratio tool to find the loan size that keeps you above a ratio you choose.
Business-purpose loans for non-owner-occupied investment property only. Debt Service Coverage Ratio is a mortgage broker: we arrange and shop financing from wholesale lenders, and every loan is subject to the lender's underwriting and approval.
How does this loan work?
Check the ratio at the new loan size
Calculate the payment on the larger loan, add taxes, insurance and HOA, and divide the current rent by it. That is the ratio lenders will care about.
Gather lease and rent records
A current lease and proof of rent payments help support the income figure, especially if the lease is at market rent.
We shop the scenario
Wholesale lenders differ on seasoning, maximum cash out and how they treat leases versus market rent. We compare them for you.
Appraisal and payoff
A new appraisal sets the value and market rent. At closing, the old loan is paid off and the remaining proceeds go to you.
What should you expect during underwriting?
- A seasoning requirement before the new appraised value can be used; the period varies by lender
- A lease and possibly proof of rent receipts on an occupied property
- A new appraisal with a rent schedule
- Reserves after closing; some programs let cash-out proceeds count toward them
- Business-purpose and non-owner-occupancy certifications
What should you check before applying?
- Taking the maximum cash out can push the ratio near a program minimum and limit your options.
- A below-market lease may hold the ratio down; consider timing the refinance after a lease renewal at market rent.
- Cash-out is only for investment property; a home you live in needs different financing that we do not arrange.
What should you know about dscr cash-out refinance?
How long do I need to own a rental before a DSCR cash-out refinance?
It varies by lender. Some ask for several months of ownership before using the new appraised value; others want longer. Share your purchase date and we will match programs to it.
Does cash out lower my DSCR?
Yes. A larger loan means a larger payment, so the same rent produces a lower ratio. The ratio at the new loan amount is the one that matters.
Can I use cash-out proceeds to buy another rental?
Yes, that is a common use. Lenders will still ask for the business purpose of the loan, and proceeds may also help meet reserve requirements.
Which guides should you read next?
Which other DSCR loan options are available?
DSCR purchase loans
Buy a rental with financing sized to what the property rents for, using appraisal market rent in the ratio.
DSCR rate-and-term refinance
Replace a rental's current loan to change its pricing, term or structure without taking meaningful cash out.
Short-term rental DSCR loans
Finance a vacation or short-term rental where the ratio may use booking history, a market projection or long-term rent.
2-4 unit DSCR loans
Finance a duplex, triplex or fourplex where the rent from every unit is combined on top of the ratio.
Investment property loans
An overview of business-purpose financing for non-owner-occupied rentals, and where a DSCR loan fits among the options.
Ready to discuss your rental property ratio?
Send the rent, the property and what you want to do. We take the scenario to multiple wholesale lenders, show how each one reads your DSCR, and explain the tradeoffs before you commit to anything.