When a cash-out refinance fits
You own a leased rental in the Metroplex, it has equity, and you want to use that equity for business: buying another rental, renovating one you own, or paying off a short-term loan. A cash-out DSCR refinance lets you do that without qualifying on personal income.
It is a business-purpose loan on investment property only. If you live in the home, or plan to, this is not the right product.
If you are coming out of a bridge loan after a renovation, see the BRRRR refinance page; the seasoning and appraisal questions are a little different.
The DSCR test uses the new payment
Taking cash out means a bigger loan and a bigger payment. The ratio is calculated on that new payment. Example with user-style inputs: a Tarrant County rental leases for $2,300. The current full payment is $1,700, a DSCR of 1.35. A cash-out loan raises the full payment to $2,150, so the new DSCR is 2,300 / 2,150 = 1.07. Same house, same rent, thinner cushion.
Taxes matter here too. If the appraisal district has raised the home’s value since you bought it, the current bill may be higher than the one in your original escrow. Use the latest statement, not the one from closing.
Run your own scenario in the DSCR calculator.
What the appraiser looks at
The appraisal sets the value the cash-out is based on, and the rent schedule supports the ratio. DFW appraisers compare your home with recent nearby sales. Bring records for improvements that add value: a new roof, foundation repair with a transferable warranty, updated systems, permitted additions. Unpermitted garage conversions or additions may not count toward value.
Seasoning and title
Most wholesale programs require you to have owned the property for a minimum period before a cash-out refinance, and some base the value on your purchase price plus documented improvements until that period passes. The rules vary by program, so tell us your purchase date and what you have spent on the property.
If the property is in your personal name and you want it in an LLC (or the reverse), ask before you transfer title, because a recent transfer can affect seasoning with some programs.
Texas has special rules for cash-out loans on homesteads. Those consumer rules are not what this page is about: we arrange business-purpose loans on non-owner-occupied investment property only.
Next step
Send the lease, your purchase date, the current loan balance and the latest tax statement with your DFW scenario. More answers are on the DFW DSCR FAQ, and our sister site dscrloanstexas.loans covers Texas-wide cash-out detail.