Cash Out Refinance

[Rogelio Andres Jimenez]

Hi Everyone! 

I hope you're all doing well. I have a question regarding cash-out refinance rates for rental properties in 2023. I recently invested in a new build at the end of last year, and the property is now 100% completed. Initially, my plan was to sell the property, but I'm now considering the possibility of keeping it and renting it out instead.

Before making a final decision, I'd like to gather some information on the current cash-out refinance rates that people are obtaining in 2023 for rental properties. If you have recently gone through a cash-out refinance process on a rental property, I'd greatly appreciate it if you could share your experience and the interest rate you were able to secure.

Additionally, any insights or tips related to cash-out refinancing for rental properties would be valuable.

Thank you in advance for your input and advice. I look forward to hearing from the community and learning about your experiences.

For reference: I can recuperate 100% of my cash invested with 75% of the property's value.  

[Mark Munson]

Hi @Rogelio Andres Jimenez

If you go the DSCR route, your rate will be somewhere between 7%-8.5% at a 75% LTV. Likely on the higher end of the range, unless you do a buy down (buy down costs can be rolled into the loan with some programs). If you are intending to keep it for the long-term, then I would be less so concerned with the rate and focus more so on a prepayment penalty no longer than 3-years. You can refinance after the 3rd year when rates may have come down. If you can qualify for a more conventional loan, then your rate may be slightly lower. Lastly, you can look at bank statement loans that have no prepayment penalty and better rates than a DSCR loan. Feel free to reach out if you need advice, best of luck!