Investment property refinance. Lower the payment, or pull the equity.
An investment property refinance replaces the mortgage on a rental with a new one, either to change the rate and term or to take cash out. Conventional loans qualify you on tax returns; DSCR loans qualify the property on its rent; bank statement loans use deposits. Leverage is lower than on a home you live in, and pricing is higher.
The right refinance for a rental depends less on the property than on how your income looks on paper and what you plan to do next. An investor with two doors and clean W-2 income is a conventional file. An investor with eight doors, heavy depreciation and an LLC is a DSCR file. We work out which camp you are in, run the numbers both ways when it is close, and place the loan with a lender in our network that fits.
Who it's for
A fit if you're…
Holding a rental bought with hard money or a bridge loan that needs a long-term exit
Sitting on equity in a stabilised rental and planning the next purchase
Approaching the conventional cap on financed properties
Self-employed, with tax returns that understate rental and business income
Wanting to move a property into or out of an LLC at refinance
Three ways to qualify
Tax returns on conventional, the property's rent on DSCR, or deposits on a bank statement loan.
Cash-out for the next deal
Pull equity from a stabilised rental and use it as the down payment on another.
Exit short-term debt
Move out of hard money or a bridge loan into 30-year fixed financing.
No portfolio cap on DSCR
Each property is underwritten on its own rent, so the count does not stop you.
LLC closings
DSCR loans close in an entity with a personal guarantee.
Side-by-side numbers
When a file fits more than one program, we show both rather than picking for you.
Investment property refinance options compared
Most rentals fit at least one of three programs, and many fit two. The decision usually comes down to how your income documents look, whether the property is in an LLC, and how many properties you already finance.
Conventional, DSCR and bank statement investment property refinance compared
If your tax returns show enough income and you hold the property in your own name, conventional financing is usually the least expensive option. The lender counts a share of the rent as income, commonly 75% of the lease to allow for vacancy and upkeep, and offsets it against the mortgage payment. It looks at your full debt-to-income ratio across every property you own, so a large portfolio or heavy depreciation can work against you even when the rentals are profitable.
Personal tax returns, including Schedule E for each rental
Current leases
Reserves for each financed property, verified from statements
Existing mortgage seasoned before a cash-out, commonly 12 months
A DSCR refinance ignores your personal income and asks one question: does the rent cover the payment? The lender divides the rent by the full monthly payment, including taxes, insurance and HOA, and prices the loan off that ratio. There are no tax returns, no debt-to-income calculation, and no cap on how many properties you finance. It closes in an LLC. The trade-off is price. The DSCR loans page covers the program in full, the DSCR cash-out refinance page covers pulling equity, and the DSCR calculator runs the ratio.
Cash-out is where most investor refinances happen. The sizing is simple: value times the lender's cap, minus what you owe, minus costs. What catches investors out is the cap itself, which is lower than on a primary home, and seasoning, which can delay a cash-out after a purchase or a renovation.
Illustrative example only
Round numbers, chosen to show the math rather than to reflect any particular lender or file. Your figures, program and pricing will differ.
Illustrative cash-out refinance on a $500,000 single-unit rental
Appraised value
$500,000
Maximum loan at 75%
$375,000
Current mortgage payoff
$240,000
Gross cash available
$135,000
Less closing costs (example)
-$9,000
Approximate cash to the investor
$126,000
At 70%, the cap on many 2-4 unit properties, the same rental would support $350,000 and about $101,000 in cash after costs.
For illustration only. Not a commitment to lend, a rate lock or an offer of credit. Terms vary by lender, by property and by file.
If the rental's first mortgage has a rate worth keeping, a HELOC on an investment property may free up equity without replacing it. Self-employed investors refinancing a home they live in should look at bank statement loans. For the full range of loans that do not rely on tax returns, see our non-QM home loan overview, and for a short-term rental, the short-term rental loans page. The mortgage guides collect everything else.
Investment property pricing is higher than owner-occupied, and cash-out pricing is higher than rate-and-term.
A cash-out refinance raises the payment, which lowers the property's DSCR and its monthly cash flow. Run the numbers on rent after the refinance, not before.
Many DSCR loans carry a prepayment penalty. Match the penalty term to how long you expect to keep the loan.
Seasoning rules can delay a cash-out after a recent purchase. Ask before you close the purchase if you plan to refinance soon.
Leverage, credit, reserve and seasoning rules vary by lender. Terms are available across our lender network, and nothing here is a commitment to lend.
FAQ
Questions buyers actually ask
What are the requirements for investment property loans?+
It depends on the program. Conventional investment property loans look at your tax returns, debt-to-income ratio, credit and reserves, and use a share of the rent as income. DSCR loans skip personal income and qualify the property on its rent. Bank statement loans use deposits instead of returns. All of them verify credit, assets and the property.
How does a cash-out refinance on an investment property work?+
You replace the rental's mortgage with a larger one and take the difference in cash. Lenders cap the new loan at a lower loan-to-value than on a primary home. On a conventional loan that is commonly 75% for a single-unit rental and 70% for 2-4 units, and DSCR programs land in a similar range. The cash can fund repairs, another purchase or anything else.
How much equity do I need to refinance a rental property?+
For a cash-out refinance, plan on leaving at least 25% equity in a single-unit rental and 30% in a 2-4 unit property on most programs. A rate-and-term refinance can sometimes go a little higher. Lower leverage usually improves pricing, and on a DSCR loan it improves the ratio too.
Can I refinance a rental property in an LLC?+
Not on a conventional loan, which has to be in your personal name. DSCR loans routinely close in an LLC with a personal guarantee, which is one of the main reasons investors use them. Moving the property into or out of an entity can affect title and insurance, so plan it with your attorney.
How soon can I do a cash-out refinance on an investment property?+
Conventional cash-out generally requires the existing mortgage to be seasoned, commonly for 12 months. Many DSCR programs allow a cash-out refinance sooner, often after six months of ownership and sometimes earlier with documented renovation costs. The rules vary by lender.
Is there a limit on how many rental properties I can refinance?+
Conventional financing caps the number of financed properties you can hold, and the requirements tighten as you approach the cap. DSCR loans underwrite each property on its own rent, so there is no portfolio cap. Investors with growing portfolios often move to DSCR for this reason alone.
What are investment property cash-out refinance rates?+
We do not publish rates. Investment property pricing is higher than owner-occupied, and cash-out adds to it. Program, credit, leverage, property type, the DSCR and any prepayment penalty all move the price. A fit check gives you real numbers for your rental.
Should I refinance my rental or take a HELOC?+
If the rental's first mortgage has a rate worth keeping and you need a moderate amount, an investor HELOC leaves it alone. If the first mortgage rate is no better than today's, or you need more cash, a refinance usually wins. Compare both on total cost, not just the rate.
Do DSCR refinances have prepayment penalties?+
Many do, commonly structured as a step-down over a few years. You can often reduce or remove the penalty in exchange for different pricing. If you expect to sell or refinance soon, price the shorter penalty before you lock.
See what your rental supports.
A 3-minute application. A soft-credit rate estimate. We structure and place your file with the lender that fits it.
