Can you HELOC/Cash-out Refinance a DSCR loan?

[Liam Willder]

Hi! I'm very new to this all and have loved reading through the forums, I'm learning a ton. TIA for the guidance!

I've been learning about DSCRs, HELOCs, Heloans, Cash-out Refinancing, etc. lately and I just had the question come to mind: can you HELOC/Cash-out Refinance a DSCR loan?

My wife and I would like to buy a rental next year (most likely using a DSCR loan, to dodge the DTI requirement), but I'm not completely sure if that would get us stuck down the road. If our rehab/the appreciation of the next few years raises the property value to the point where we'd want to pull equity out of it to use toward a subsequent rental, would we be able to on a DSCR? If so, what would be the best way to go about doing that?

Thank you for the help! I really appreciate it. 

Liam

[Nicholas L.]

@Liam Willder

yes, you can generally refinance out of a DSCR loan and into a new loan. but there are pre-payment penalties in the first few years that incentivize you not to:

https://www.biggerpockets.com/forums/49/topics/1179403-dscr-...

here's the thing, though - you generally wouldn't buy with a DSCR loan, rehab, and then refinance again; usually you'd refinance into a DSCR loan, and be done.