Refinance an existing investment property
DSCR Refinance Loans for Rental Properties
Review a DSCR rate-and-term refinance for an eligible rental property using the current value, rent, payoff, credit range, and proposed loan structure.
When a DSCR refinance may fit
A rate-and-term DSCR refinance can be used to replace existing debt on a non-owner-occupied rental property. Investors may review a refinance to change the loan term, move from short-term or private debt, adjust the payment structure, or place an eligible property into a longer-term business-purpose loan.
Estimated valueProvide a realistic current property value.
Current payoffShare the existing mortgage balance and any other liens.
Rental incomeProvide current rent and the property’s lease or operating status.
Key refinance questions
- Is the property currently rented, vacant, or transitioning between tenants?
- What is the estimated property value and current mortgage payoff?
- What monthly rent can be documented or supported by market rent?
- Is the existing loan seasoned, and are there any prepayment penalties?
- What is the investor’s credit range, liquidity, and reserve position?
- Will title remain the same, move to an entity, or require another vesting review?
Rate-and-term versus cash-out
A rate-and-term refinance generally focuses on paying off eligible existing debt and permitted closing costs without taking significant equity proceeds. A cash-out refinance adds a request for proceeds beyond the eligible payoff and transaction costs. The distinction can affect leverage, seasoning, pricing, reserve requirements, and documentation.
Review the complete payment—not only the rate
A refinance decision should consider the interest rate, principal-and-interest payment, taxes, insurance, association dues, term, amortization, interest-only period when available, prepayment terms, closing costs, and the property’s expected cash flow. The lowest quoted rate is not automatically the best overall structure.
Frequently asked questions
Can I refinance a hard-money or bridge loan into DSCR financing?
Eligible stabilized rental properties may be considered for a DSCR refinance from short-term debt. Property condition, seasoning, value, rent, payoff, and documentation must be reviewed.
What if the property is currently vacant?
Some programs can use eligible market rent, while others may require a lease or additional conditions. Vacancy status must be disclosed during the quote review.
Can closing costs be included?
Permitted costs may be included within program leverage limits, subject to value, payoff, underwriting, and the final loan structure.
Does a prepayment penalty matter?
Yes. The current loan’s payoff terms and the proposed DSCR loan’s prepayment structure can materially affect the economics of a refinance.
Talk through the rental property numbers.
Call the NonQM123 DSCR Desk or send the scenario online for a business-purpose investment-property review. Program availability and terms depend on the complete scenario and underwriting approval.
Business-Purpose Investment Financing
This DSCR website presents financing intended for eligible non-owner-occupied investment properties and business purposes only. The subject property may not be occupied by the borrower or the borrower’s family when prohibited by the applicable loan program. Loan proceeds may not be used for personal, family, or household purposes.
- Non-owner-occupied investment property
- Business-purpose loan proceeds only
- Subject to underwriting and state restrictions
Program availability, occupancy requirements, loan terms, and eligibility are subject to underwriting guidelines, property review, credit approval, state restrictions, and lender approval.