How much equity do I have to keep?
More than on a purchase. Lenders see a DSCR cash-out refinance as the riskier transaction, because you are taking money off the table rather than putting it in. So the ceiling on the new loan drops, and it drops further when the rent only just covers the payment.
| Credit score | Most the new loan can be |
|---|---|
| 660 to 699 | 60% to 70% |
| 700 to 719 | 70% to 75% |
| 720 and up | 75%, and 80% on one program |
| Coverage below 1.00, or no ratio | 70% or less; 65% or less with no ratio |
A rate-and-term refinance, where you replace the loan without taking cash, keeps the purchase ceilings for the most part. The down payment article shows those by credit band.
An example, with made-up numbers.
If the appraisal comes in at
$500,000and the ceiling is three quarters of it
$375,000Pay off a $250,000 balance and the cash before closing costs is $125,000. Lower the ceiling to 70% and the cash falls to $100,000. A math example, not a Lendwise ceiling or a quote.
How long do I have to own the property first?
For a cash-out, most programs want to see some time between the last transaction and the new one. The common rule is half a year. If you bought with cash, a delayed-financing refinance lets you pull your money back out sooner, using the price you paid rather than a new appraisal in some cases.
- Cash-out seasoning of 6 months from the last transaction on most programs, and 12 months on some; measured from the note date to the acquisition on some.
- A refinance of a loan that was itself a cash-out less than 12 months ago is treated as a cash-out on at least one program.
- One program will not lend to a borrower who took cash out of any property in the past 6 months.
- Several programs cap the cash in hand at $500,000 to $1,000,000, with the lower cap at higher loan-to-value.
- Rate-and-term refinances often have no seasoning rule of their own.
Checked by underwriting, as of November 2026.
How soon can I refinance after buying is the question behind most of these rules. The answer is: for a better rate and term, usually right away, subject to any prepayment penalty on the current loan; for cash, after the seasoning period.
What rent counts on a refinance?
On a purchase the appraiser estimates the market rent. On a refinance you usually have a lease, and several programs count the lower of the lease and the appraiser's estimate. A property sitting empty is a harder case.
- Several programs use the lower of the current lease and the appraiser's market rent on a refinance.
- An unleased property is not eligible on one program unless it was recently renovated (the short-term rental case is covered in its own article), and then the refinance is capped at 70%.
- Short-term rentals are their own case on a refinance; the short-term rental article explains what history is needed and how the income is counted.
Checked by underwriting, as of November 2026.
What can I use the cash for?
The rental business. Buying or improving another rental, repairs on this one, reserves for the portfolio, paying off a loan on the property. Those are business purposes, and a DSCR cash-out is a business-purpose loan; the use you state has to fit the program you choose, and the lender checks it.
What it cannot do is pay off your personal debt. People ask, and the answer is no: these are business-purpose loans, and the money cannot be used to retire credit cards, a car loan or the mortgage on the home you live in. You will sign a statement about the purpose of the loan and about occupancy, and the lender means it.
I also steer clients away from pulling the maximum. A rental carrying its biggest possible loan has no room for a bad year, and the extra cash tends to cost more than it earns. Take what the plan needs and leave the rest in the property.
Can you refinance a DSCR loan into a better one?
Yes. A DSCR loan can be refinanced into another DSCR loan, or into a conventional investment loan if your personal income supports one. Timing is about the prepayment penalty on the current loan: once it has run out, or when the savings clearly beat the fee, the refinance makes sense. The article on how many DSCR loans you can have covers the penalty structures.
A refinance also resets the rent test. If the property now earns more, the stronger coverage ratio can open programs and improve the terms. If it earns less, the opposite is true, which is one of the trade-offs the downsides article describes.
Can I get a HELOC on a rental property instead?
Rarely as a line of credit. Most banks that offer lines of credit limit them to the home you live in. What exists for rentals is a closed-end second mortgage behind the first, on a few programs, with its own rent test and a lower combined ceiling. Whether that beats a cash-out refinance of the first loan depends on the rate you already have and how much you need.
- Closed-end second liens on a DSCR basis exist on a few programs; a home equity loan on a rental property is possible this way, a revolving line rarely is.
- One program asks for 6 months of reserves covering both the first and the second loan.
Checked by underwriting, as of November 2026.
What should I have ready?
- The current lease and the last year of rent deposits.
- The latest mortgage statement and the property tax and insurance bills.
- Bank statements showing reserves after closing.
- The entity documents if an LLC holds title.
- A sentence about what the cash is for. It has to be the business.
The requirements article lists the rest of the file, and the DSCR rates page shows saved refinance examples with their dates.
Sources and important context
Educational content, not an offer, approval or rate quote. The DSCR loans described here are business-purpose loans for rental property you will not live in. Every range describes the programs Lendwise uses on the date shown, never a promise for your file. Calculator results are estimates, not program requirements or pricing tiers.