Side-by-side comparison
| Question | Cash-out DSCR refinance | HELOC on an investment property |
|---|---|---|
| What it does | Replaces the first loan with a new, larger loan | Adds a second lien; first loan stays |
| How you receive funds | Lump sum at closing | Draw as needed during the draw period |
| How it qualifies | Property income vs payment (DSCR) | Usually personal income, debt ratios and credit |
| Availability on STRs | Offered by many DSCR programs that accept STR income | Less common on investment properties, rarer on STRs |
| Effect on current loan | Pays it off, including its terms | Keeps your current first loan and its terms |
| Closing costs | Full refinance closing costs | Often lower upfront costs |
When a cash-out DSCR refinance fits
A cash-out DSCR loan fits investors whose STR has built equity, who can document its income and who want a lump sum for a defined business purpose: the next Valley purchase, a remodel, furnishing a new listing or reserves. It does not require personal income documentation for qualifying, which helps self-employed investors and those with several properties.
The trade-off is that it replaces your existing loan. If your current loan has terms you would rather keep, that matters. Our STR cash-out refinance page walks through what lenders check.
When a line of credit might fit
A line on an investment property can make sense if you want flexible access to funds over time, want to keep a favorable first loan, and can qualify on personal income. These lines are offered by a narrower set of institutions, and many exclude short-term rentals entirely. We do not arrange HELOCs, so compare that option directly with providers that offer it.
Cash-out math example
Suppose your Scottsdale STR has a current balance of $350,000, and a new $480,000 cash-out loan is proposed. Payout history averages $6,300 a month, and the new full payment is $4,900. The ratio is 6,300 / 4,900 = 1.29. Before closing costs, the cash out would be about $130,000.
Illustrative math using user-style inputs; not a loan offer.
Next step
If a cash-out DSCR refinance sounds like the better fit, gather 12 months of statements, your current mortgage statement and your city license, then send the scenario.