Cash Out Without Income Docs: The DSCR Refinance Strategy for Real Estate Investors
- By Jim Blackburn
- on
- Tags: Calculators, New Construction, Spec Homes
If you’re a real estate investor looking to access your property’s equity without the hassle of income verification, the DSCR (Debt-Service Coverage Ratio) Cash-Out Refinance could be your best financial move.
This type of loan is designed for rental properties and qualifies you based solely on rental income, not your personal income or tax returns. Let’s walk through how the DSCR Investment Cash-Out Refinance Calculator works and what it means for your bottom line.
Step 1: Start with the Basics
Here’s the sample refinance scenario:
- Current Loan Balance: $250,000
- Estimated Property Value: $400,000
- Estimated Monthly Rent: $4,000
- Interest Rate: 6.99%
- Annual Taxes & Insurance: $7,400 combined
- Monthly HOA: $0
- Target DSCR Ratio: 1.0
The DSCR is the ratio of rental income to total housing expense (PITIA). A DSCR of 1.0 means your rent exactly covers the monthly payment. Most lenders require 1.0 or higher, though some will allow as low as 0.75 (with pricing adjustments).
Step 2: Maximum Loan Based on DSCR
Given your rental income of $4,000/month, a DSCR of 1.0 allows a maximum monthly PITIA of $3,383.
With this threshold:
- Max Loan Amount: $320,000
- Cash Out Available: $60,000
(This factors in your existing $250,000 loan balance and approx. 4% closing costs)
You walk away with $60K—without submitting W-2s, pay stubs, or tax returns.
Step 3: Monthly Payment Breakdown
At a 6.99% interest rate, your estimated monthly costs on the new $320,000 loan are:
- Principal & Interest: $2,127
- Taxes: $417
- Insurance: $200
- HOA: $0
Total Monthly Housing Expense: $2,743
That leaves a comfortable margin under your $4,000 monthly rent, resulting in a DSCR above 1.4—ideal for most lenders and a good sign of strong cash flow.
Step 4: Strategic Use of Cash Out
With your $60,000 cash back, here are a few smart ways investors reinvest:
- Buy your next rental with a DSCR loan and minimal down
- Renovate another property to raise rents or property value
- Pay down high-interest debt
- Build reserves for more flexible financing options later
Because DSCR loans are based on asset performance, not borrower income, they’re especially attractive for self-employed investors, those scaling portfolios, or anyone managing complex tax situations.
Final Thoughts
DSCR cash-out refinances offer flexibility, simplicity, and speed. If your property cash flows, you can access equity without jumping through traditional hoops. And with rates still competitive and rental income strong, now may be a great time to unlock funds to expand your portfolio or improve your cash position.
Ready to Refinance with No Income Docs?
Get a tailored quote and consultation with a lending expert who specializes in DSCR strategies. Let your property qualify you—and keep building your wealth, deal by deal.
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Schedule a CallImportant Disclaimer
This calculator is for illustrative purposes only and does not constitute financial, legal, or investment advice. Results are based on general assumptions and may not reflect actual performance or eligibility. This is not a loan estimate or approval. Please consult with a licensed mortgage advisor before making financial decisions.
