Cash Out Refi rental

[Abe Appan]

When we moved to our new house, we rented our old house. We have 350 K to 400 K in equity in that house which has a 2.75% interest rate rent right now is 3200 a month against the 950 a month mortgage payment.

Welcome any suggestions on how I should approach Refi in today’s market. It is super important that my debt to income ratio is still preserved as my new loans on future rental purchases maybe impacted.

[Carrie Matuga]

You’re sitting on a great asset here — that 2.75% rate and strong cash flow are gold. Instead of touching the first mortgage, you could do a second position loan or HELOC to access your equity. Some lenders will go up to 80% combined LTV, and if you structure it as a DSCR-based second, it won't hit your DTI the same way a conventional cash-out would.

As for your future rental purchases, consider not using conventional financing at all. Instead:

• Buy in an LLC and use DSCR loans (which don't affect personal DTI),

• Or do a hybrid strategy: some conventional, some DSCR, so you can balance cash flow, rates, and how much room you're leaving in your personal debt profile.

That approach gives you access to capital now and preserves your borrowing power as you scale.