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Two ways to take the equity
Both options are second liens on an investment property, and both are approved on DSCR terms: the lender compares what the property rents for with what it costs to own each month. If the rent supports the payment, the deal works. Your tax returns, W-2s and personal debt-to-income ratio aren’t part of it.
How the money comes
- DSCR HELOC
- A credit line you draw from and can reuse as you pay it down
- DSCR second mortgage
- One lump sum at closing (also called a closed-end second or DSCR HELOAN)
Your first mortgage
- DSCR HELOC
- Stays in place, untouched
- DSCR second mortgage
- Stays in place, untouched
What qualifies you
- DSCR HELOC
- The property’s rent compared with its payment
- DSCR second mortgage
- The property’s rent compared with its payment
Combined LTV limit
- DSCR HELOC
- 75%
- DSCR second mortgage
- 75%
Works best for
- DSCR HELOC
- Rehab paid in stages, cash kept in reserve, money ready for the next deal
- DSCR second mortgage
- A set amount: a payoff, one project, or a down payment on another property
Why a second lien can beat a cash-out refinance
- You keep your rate. A cash-out refinance reprices the whole loan. With a second lien, only the new money is at today’s pricing.
- Idle equity goes to work. A rental you bought years ago may have gained value you can’t reach without disturbing its loan. A second lien gets it out.
- Your Schedule E stays out of it. Landlord tax returns are designed to show as little profit as possible. DSCR approval only asks whether the rent covers the payment.
Sometimes a full refinance is the better move — if your current rate is nothing special, or you’d rather have one loan instead of two. The no-seasoning DSCR cash-out uses today’s appraised value, with no title seasoning on loans of $100K or more. I’ll run the numbers both ways so you can compare.
What I look at to qualify you
The property does the qualifying. I compare its rent — from the actual lease, or market rent if it isn’t leased — with its monthly payment. It can be a 1–4 unit investment property held in your own name or in an LLC. Your first mortgage plus the new second can’t be more than 75% of what the property is worth. To see your options, I run a soft credit check only.
To get started I typically need your ID, the mortgage statement, the insurance declaration, and either the lease or a market-rent estimate.
Why I quote the rest on a call
The 75% combined LTV limit is firm for both the line and the lump sum. Everything else — minimum credit score, pricing, and the coverage ratio a lender wants — really does change with the lender, the property and the numbers on your rental. I shop these across 100+ lenders, so one published set of terms would be too good for some files and too strict for others. Send me the address, the rent, what you owe and a rough credit score, and in about ten minutes I can give you actual terms. Call or text me at 949-868-2422.
