Cash-Out Refinance to Buy Your Next Rental Property in Texas
The short answer
A cash-out refinance lets you turn equity in a property you own into cash, which some investors use as the down payment on the next rental. It can speed up growth, but it also raises your balance and monthly payment, so the math has to work.
How the idea works
Check your equity. Lenders limit how much of a property's value you can borrow against.
Refinance and take cash out. The new loan pays off the old one and you receive the difference, minus costs.
Use the cash on the next purchase. Lenders will want to see where the down payment came from.
What to weigh
The new payment on the property you refinanced, and whether its rent still covers it.
Closing costs, which can be a meaningful share of the cash you pull out.
Your reserves, since lenders often want cushion across all your properties.
A bigger debt load means less room if a rental sits empty.
If the property you want to buy will qualify on rent, read DSCR loan requirements: the numbers. Texas has special equity rules for primary homes, covered in our cash-out refinance guide.
Frequently asked questions
Is this a good idea for everyone?
Not always. It depends on your cash flow, equity and goals, so run the numbers with a professional you trust.
Can I use these funds for my own home?
Business-purpose loans are not for owner-occupied use.
Let's look at your options. Call (469) 414-5554 or visit https://mohavemortgages.net/home-texas.
By Kelly Welton, Mortgage Broker (NMLS #314183), Mohave Mortgage Texas Branch. Mohave Mortgage NMLS #1830581 · Texas Branch NMLS #2690682 · Equal Housing Opportunity. General information only, not a commitment to lend or financial advice. Programs, rates and guidelines vary and change.
