Cash Out Refinancing On a 4-Unit Property

[Andrew David]

When looking to obtain "cash-out" refinancing on a 4-Unit Multifamily Property, how do lenders think through sizing the loan? Is it based on residential methodology (e.g. market comparables) or more so commercial methodology (e.g. Debt Service Coverage Ratio, Debt Yield, Loan-to-Value, etc)?

[Brie Schmidt]

Originally posted by @Andrew David:

When looking to obtain "cash-out" refinancing on a 4-Unit Multifamily Property, how do lenders think through sizing the loan? Is it based on residential methodology (e.g. market comparables) or more so commercial methodology (e.g. Debt Service Coverage Ratio, Debt Yield, Loan-to-Value, etc)?

 It is a residential property, it is valued on comps.  

They will use your tax returns and how you report your income and expenses to either increase or decrease your monthly income for DTI purposes so it will either increase or decrease the amount of your approval