Investment home cash-out refinancing in DFW

[Jason Sung]

HI,
I have a house in DFW with no mortgage (free and clean) and rented to a tenant $4000/month. It is a mid-term rental and the current lease contract is for 4 months (while the tenants fix their own house) but can be extended.

House market value is about $450k and there is no mortgage now (free and clear). I want to cash-out $300k. I contacted a lender and they cannot do it since they want at least one year lease contract. 

To pull cash out of the investment home, what would be the best for me? FYI, I have credit score 750+. 

[Jay Hurst]

Quote from @Jason Sung:

@Andy Webb thanks. I checked Investmark Mortgage website. Is DSCR considered a Hard Money? How is its interest rate compares to 30 year fixed loan in general?

The issue with DSCR is not really the rate (although it will be higher) but is really the terms of the loan. You will pay more in upfront costs and you will likely have a pre-payment penalty. IF rates do fall over the next 3-5 years (the term of most pre-payment penalties on DSCR) that can be very costly.  You would need to speak with a broker/banker who has the ability (and license)  to do BOTH  DCSR and full doc to make sure you get the best option for you, not just the option they can sell you. 

And there are DSCR loans without pre-payment penalties with reasonable rates. However, they  usually are not  available to non NMLS licensed  brokers.