Refinance STR HELOC to conventional

[Chris Carrigan]

I have a STR which I renovated using a HELOC on my primary home. Balance is $79k at 7%. No other mortgage on the STR. The STR has been in business now for 8 months. Gross earnings average is $2k per month. Is it possible to refinance the HELOC now into a conventional on the STR to remove the HELOC from my primary home and free that up for other investments. The STR's value is now about $200k, not counting the acreage which is about another $150k of value.

[AJ Wong]

Quote from @Chris Carrigan:

I have a STR which I renovated using a HELOC on my primary home. Balance is $79k at 7%. No other mortgage on the STR. The STR has been in business now for 8 months. Gross earnings average is $2k per month. Is it possible to refinance the HELOC now into a conventional on the STR to remove the HELOC from my primary home and free that up for other investments. The STR's value is now about $200k, not counting the acreage which is about another $150k of value.

Hi Chris, congrats. The 8 mos isn't quite long enough to utilize just the STR income to qualify but many lenders allow AirDnA projections to be utilized as the income to qualify. Otherwise a typical DSCR loan based on market long term rents should be sufficient to qualify? You could also do a simultaneous closing of a fixed first mortgage as a ‘cash out' refinance and piggyback a new investment property heloc for future use..although the heloc rate will be stronger on the primary. In general It sounds like a low enough LTV that it could even qualify for an instant issue and AVM (no apprisal.) Rates and terms will be more attractive with verifiable income. Check in with the @Joseph Chiofalo for HELOC and refinance advice. We just did a DSCR cash out refinance for a client. Appraisal was Tuesday and back Friday at value. Efficient closing and very workable terms. Good luck!