Cash-Out Refinance is a refinance where the new loan exceeds the existing payoff, releasing the difference to the borrower at closing. Used by investors to extract equity from stabilized properties for the next acquisition — the second R in BRRRR. LTV caps run tighter than purchase (typically 70-75% on DSCR cash-out vs 80% on purchase), seasoning requirements apply, and cash-out treatment can trigger different reserve, ARV-source, and pricing rules than rate-and-term refinance.
Underwriting