A refinance swaps the loan on a property for a new one. Investors use it to move from short-term to long-term debt, to turn equity into cash, to cut a payment, or to tidy several loans into one.
Out of the bridge loan, into a 30-year loan
This is the classic sequence. You buy and renovate with a fix and flip loan, which is short and interest-only. Once the house is finished and rented, a long-term rental loan pays the bridge loan off. Your payment falls, your term stretches to as long as 30 years, and you can often take back most of the cash you invested.
Cash out for the next deal
On a rental we lend up to 80% of the appraised value on a cash-out refinance. What is left after paying off the old loan is yours to use.
| Example | Amount |
|---|---|
| Appraised value after renovation | $450,000 |
| New loan at 80% | $360,000 |
| Bridge loan paid off | $300,000 |
| Cash back, before closing costs | $60,000 |
An illustration, not a quote.
A lower payment
Leaving a higher-rate bridge loan, or refinancing after rates have fallen, reduces the cost of holding the property and improves cash flow every month.
One loan for several properties
A portfolio loan gathers several rentals under one note and one payment. A 120% partial release lets you sell a single property out of the group later.
How we qualify a refinance
On the debt service coverage ratio: rent divided by the full monthly payment. We prefer 1.0 or higher. Personal income is not reviewed. Details are on the DSCR rental loans page.
Before you refinance
- Check your existing loan for a prepayment penalty.
- Recalculate the payment with South Carolina’s 6% assessment ratio and current insurance quotes.
- Budget for closing costs, including the closing attorney’s fee.
Send us the property and we will show you what a refinance would look like.