DSCR Second Mortgages on Texas Rental Properties

A lot of Texas investors have rental equity locked behind a first mortgage they don’t want to touch. A DSCR second mortgage can free up some of that equity without refinancing the first. It’s part of our non-QM loan options.

Second mortgage vs cash-out refinance

• DSCR second: keeps your existing first mortgage and its rate. You add a second payment.
• Cash-out refinance: replaces your first mortgage with a new, larger loan at current terms.

Which one makes more sense depends on your first-mortgage terms, how much cash you need and what each option costs. Combined loan-to-value limits and terms vary by lender. We compare both for your scenario. Borrowing against the home you live in instead? Compare a HELOC on your home, which follows separate Texas homestead rules.

Common uses

• A down payment on your next rental
• Renovations or improvements
• Other investment needs

Fits when

• You have a low first-mortgage rate to keep
• You have equity in a rental
• You’re funding the next purchase

Look elsewhere when

• It’s your homestead. Texas home equity rules apply to homestead property, and this program doesn’t cover it.

Documents

• Current mortgage statement
• Leases
• Insurance declarations
• Entity documents, if the property is held in an LLC

Requirements vary by lender.

How CapFi shops it

I compare DSCR second mortgage options across more than 50 wholesale lenders, and we can sign up an additional lender if your deal needs one. See also our investment property loans and, for self-employed investors who’d rather qualify on income, bank statement loans.

FAQs

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