Refinance scenario
Rate-and-term DSCR refinance: change the loan, keep the equity
A rate-and-term refinance replaces your existing rental mortgage with a new one for roughly the same balance. No cash out. The goal is a better structure: a different term, a fixed payment instead of an adjustable one, a loan in your LLC, or simply a lender you would rather work with.
Who this fits
- Landlords with an adjustable or balloon loan who want long-term fixed debt
- Investors moving a property from personal name into an LLC loan
- Owners who want to remove a partner or co-borrower from the loan
- Landlords restructuring a short-term commercial note
When a rate-and-term refinance makes sense
The test is whether the new loan improves your position after closing costs and any prepayment penalty on the current note. That may be a lower payment, but it is just as often stability: replacing a balloon with a fully amortizing loan, or an adjustable payment with a fixed one.
We lay out the break-even plainly: what the refinance costs, what it changes each month, and how long it takes for the change to pay for itself. If the answer is that you should wait, we will say so.
Why rate-and-term can be easier than cash-out
- Leverage limits are often more generous when no cash is taken out
- Seasoning rules can be less restrictive
- Coverage is usually stronger because the balance is not growing
We are a mortgage broker. We arrange and shop financing from wholesale lenders; we do not lend our own money. Business-purpose loans on non-owner-occupied investment property only.
How it works
Four steps, no surprises
Review the current loan
Balance, payment, maturity, prepayment terms and anything that triggers a cost to exit.
Define the goal
Lower payment, longer term, fixed structure, entity change or a cleaner title situation.
Compare offers
We put the new options next to the current loan, including closing costs and prepayment.
Close
Appraisal, title and underwriting, then the old loan is paid off.
Questions
Common questions
Can I roll closing costs into a rate-and-term refinance?
Many programs allow financing reasonable closing costs within rate-and-term limits. The exact treatment varies by lender.
Will I have a prepayment penalty on the new loan?
Many DSCR loans include a prepayment structure. We compare options, including shorter or no-prepayment structures where available, and explain how each affects pricing.
Can I switch from personal name to an LLC in the refinance?
Often, yes. Many wholesale DSCR programs close in an entity with a personal guarantee. We confirm documentation needs early.
Next step
Bring us the loan you have. We will show you the loans you could have.
Share your current balance, rent and maturity date. A Loan Daddy loan specialist will compare what wholesale lenders can offer for a business-purpose refinance and walk you through the trade-offs, without pressure.