Home / HELOC / Vs cash-out
Updated September 2026
HELOC vs cash-out
Do not refinance a cheap first just to get cash.
A cash-out refinance replaces the first mortgage. On a rental DSCR, that cash-out often lands at 70 to 75% LTV and does not need tax returns. A HELOC leaves that first mortgage alone and puts a line in second position, often at 80 to 85% combined, with a draw period around 10 years and then amortization. You pay interest on what you draw. If the first rate is worth keeping, the HELOC is the cleaner cash. If you also need to reprice the first, cash-out can win. HELOC only in GA, FL, TN, AL, NC, SC. Outside those states, send the DSCR. We text the one that fits.
The screen
| HELOC | Cash-out refinance | |
|---|---|---|
| First mortgage | Untouched | Replaced |
| How cash arrives | Draws on a line | One new loan |
| Usual leverage | About 80–85% combined | DSCR cash-out often 70–75% |
| Rate | Prime plus a margin, variable | Fixed DSCR options exist |
| Best move | First rate is worth keeping | You want one new rental loan |
What we fund
- Equity taps that should not touch the first
- Rental cash-out when one loan is simpler
- Side-by-side numbers before you pick
What we still need. Short list.
- Balance and rate on the first
- Value and the cash you want
- Occupancy: primary, second home, or rental
Questions
What if my first mortgage is 3%?
Do not kill it for cash. Start with a HELOC.
What if the property is a rental and I want it in an LLC?
A HELOC works on a rental too. Primary, second home, or rental. DSCR cash-out is the door if you want one new loan.
Can you promise which one is cheaper?
No. We run the numbers and text them. Not a rate lock.
Related
These are the guidelines we screen. They are not a promise that your file hits the maximum. Credit-event seasoning, occupancy, and property condition still have to be confirmed. Not a commitment to lend. We text. We do not call.