What kind of a loan i can qualify

Question

I have fully paid investment property which i am finishing to rehab. i am planning to either airbnb or long term rental on this house. i am looking for cash out refinance options on this house without my personal income verification. Please suggest what kind of a loan i am eligible for. Thanks

Jacob Sherman · Answer

Hey Irfan ! Yes you'd be able to utilize the DSCR loan (debt service coverage ratio) upto 80% cashout of the homes value . This product is no income no doc and underwritten purely on the rent schedule of the property . What is the scenario looking like ?

AJ Exner · Answer

Irfan,

Absolutely second Jacob, that is the definition of a DSCR loan. The toughest thing might be if you decide to use it as an Airbnb because the "income" of the property is a big factor in determining the type of DSCR lender that you can use. A lot of lenders will even require that a tenant is actively in the property in order to close on the refinance.

Check with any lender that you might work with to see if they are okay with 'vacant refinances', that will usually let you know if they need a tenant in there or if they are okay with vacant properties (and usually okay with Airbnb-type investments as well).

Good luck! Happy to help where I can.

Jay Hurst · Answer

@Irfan Saeed  As mentioned, a debt service coverage ratio (DSCR) does not look at your personal income but rather simply the income that the property generates. That is the pro of the DSCR loan. The con is the rate is a often a little higher but much more important is that the upfront costs are higher and most DSCR loans have a pre-payment penalty some up to 5 years. That can be VERY expensive if rates do drop on the next year or two.

That being said they can be powerful products as long as you understand the pro's and con's.

Givo Aghasi · Answer

@Irfan Saeed Considering your fully paid investment property, you might explore a Debt Service Coverage Ratio (DSCR) loan option for your cash-out refinance needs. DSCR loans primarily evaluate the property's income-generating potential rather than relying solely on your personal income verification. This can be advantageous for investors like yourself.

Carrie Matuga · Answer

@Irfan Saeed I'd suggest you look into a DSCR loan. They work for both long term and short term options! As long as your purchase was over 6 months ago, you can go up to 80% if shorter than 6 months, it's typically closer to 75%. You'd qualify for this loan by your credit score (660 min but best terms above 720) and the DSCR ratio (your rental income/PITI).

What kind of a loan i can qualify

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