Dscr brrrr Investors

[Lipa F.]

Anyone has tried that?

Instead of a cash-out refi, do a rate-and-term DSCR refi to lock in the lower rate, then add a DSCR HELOC behind it.

Cash-out DSCR usually tops out around 75%. Even at 80%, the rate jump is rough and makes it hard to get all your capital back. Rate-and-term pricing is way better.

With the HELOC, you can sometimes get to ~85% combined. HELOC rate is higher, but it's only on part of the stack, so blended cost still comes out lower.

End goal: more cash out, better rates overall. Curious if anyone’s run this and how it played out.

[Devin Peterson]

DSCR Helocs are an anomaly. I have not seen or heard of a reputable lender who will truly lend to you a heloc underwrite as a DSCR with a competitive rate. The best you can do is a heloan 2nd with DSCR and at that rate, you might as well stick with the first cash out. The only true way to get a heloc on an investment to is to actually occupy it as a true primary before you move out and repurpose it.