Cash Out Refinance Requirements

[Hannah Costello]

Hello, my partner and I are curious about the requirements that lender's request to do a cash out refi an investment property into another investment loan. Do they require things like proof of cash reserves, credit, employment, etc? We've had our property for 2 years now and believe the value has gone up a lot. We would like to use the money towards our next purchase. Thanks in advance! 

[Carlos Valencia]

Hello Hannah, 

Yes if your cashing out using conventional financing those are things they will ask of you Credit, Income and assets. You can also do cashout refi using non-conventional products like DSCR loan which is a Debt Service Coverage ratio loan. This loan only uses your rents to qualify so it will depend on how the property is performing. Thats what they look at for example will the new mortgage payment with taxes and insurance be paid covered from rents 100% or more. Or will the rents be short and only cover 80% of the mortgage payment with taxes and insurance. Depending on your scenario its worth looking at both options. DSCR or conventional. You can also use DSCR to buy your next investment property and not refi your first unless you need the money.

@Albert Bui @Matthew Kwan