Utilize the Values of Your Properties

Conventional Cash-Out Refinance

Pros:

• Fixed rate options
• Lower interest rates than other options
• Larger loan amounts possible

Cons:

• Closing costs
• Stuck even if rates drop

2nd Mortgage

Pros:

• Keep your current low-interest loan
• Faster and less paperwork generally
• Usually roll closing costs into the loan and no down payment needed

Cons:

• If you have a low rate now, you lose that
• More paperwork than other loans

DSCR (Cash Out or 2nd)

Pros:

• Less paperwork
• Generally has a faster close time
• Focuses on the property not the borrower

Cons:

• Still need decent credit (usually 660+)
• Slightly higher interest rates normally (.5-1%)
• Usually requires a down payment of 15-25% and closing costs

HELOC

Pros:

• Keep your current loan
• Less paperwork
• Fastest closing of the 4 options
• Closing costs usually less than some of the others

Cons:

• Higher interest rates (sometimes 1-2%)
• Draw period limited to 5-10 years
• Lenders can suspend draws on the line of credit (happened in 2008 and 2020)
• Click here to see if you qualify for a HELOC in less than 10 minutes