Cash-Out BasicsQuestion 6
What Is the Maximum LTV for a Cash-Out Refinance on a Rental?
Most conventional lenders cap cash-out refinance LTV at 70% for investment properties. DSCR lenders may go to 75% for strong DSCR ratios and credit scores.
Most conventional lenders cap cash-out refinance LTV at 70% for investment properties. DSCR lenders may go to 75% for strong DSCR ratios and credit scores.
- What to know: Understand the mechanics of cash-out refinancing so you can evaluate whether it fits your Houston investment strategy.
- Houston context: Houston's consistent appreciation and strong rental demand make cash-out refinancing a viable and popular strategy for local landlords.
- Action step: Calculate your potential cash proceeds using the formula: (Appraised Value x Max LTV) - Current Balance - Closing Costs = Cash Out.
Bottom Line
Cash-out refinancing is a foundational tool for Houston portfolio builders. Master the basics before committing to ensure it aligns with your investment goals.