Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
The Quick Read: It depends on the appraised value, what you still owe on the hard money note, the costs of the new loan, and how long you have owned the property. A 660 score does not set a dollar amount. On most files it mainly decides which leverage tier you land in, and cash is whatever remains after the payoff and costs come out.
- Cash to you equals the new loan, minus the payoff on the old note, minus closing costs.
- A new hard money loan on a refinance generally runs up to 65% of value, and that cap varies by lender, property, and experience.
- A DSCR loan that pays off hard money goes up to 75% LTV on a cash-out refinance of a standard rental, subject to lender guidelines.
- Seasoning, the wait after you buy, often decides whether the loan is sized on appraised value or on what you paid plus rehab.
- A 660 score sits above the 620 hard money minimum and above the line where extra conditions apply, which is below 660. The top leverage tiers are reserved for experienced investors, so experience matters alongside the score.
Key Terms Defined
Hard money loan: a short-term, asset-based loan from a private lender, sized mostly on the property and the plan. Investopedia describes these loans as costlier than bank financing and sized at lower loan-to-value ratios.
Cash-out refinance: a new, larger loan that pays off the old one and hands you the difference. Corporate Finance Institute draws the same line between that and a rate-and-term refinance, which only swaps one loan for another.
LTV (loan-to-value): the loan balance divided by the property’s appraised value.
Loan-to-cost: the loan divided by what you paid plus documented rehab spending.
Seasoning: the waiting period a lender wants between buying the property and refinancing it.
PITIA: the full monthly obligation of principal, interest, taxes, insurance, and any association dues.
DSCR (debt service coverage ratio): the property’s monthly rent divided by its full monthly PITIA.
What Is the Formula for Cash Out?
Net cash equals the new loan, minus the hard money payoff, minus the costs of the new loan. The payoff is more than the original balance. It includes accrued interest and any exit fees on the old note. Everything else here is about what makes the first number bigger or smaller.
The new loan is the lower of two limits:
1. The value limit. Appraised value times the maximum LTV for that program and credit tier.
2. The rent limit. The largest loan whose full payment the lender-used rent can cover at the program’s coverage floor. This one applies to DSCR loans, not to hard money.
Your 660 score touches only the first limit, and only through the leverage tier. It never appears directly in the subtraction.
Which Number Does 660 Actually Change?
On a hard money loan, 660 changes less than most investors expect. The program minimum is 620, with extra conditions below 660, so a 660 sits above that line. Hard money underwriting is asset-based. The lender looks at the property, the plan, and the exit. A refinance that returns cash generally runs up to 65% of value, and that figure varies by lender, property, and experience.
On a DSCR loan, credit tiers matter more. The credit steps on the DSCR loan sheet are 620, 660, 680, and 700, with 620 as the floor. A 700-plus score opens the strongest leverage tiers. The ceiling for a DSCR cash-out refinance is 75% LTV on a standard rental, but a 660 file may sit below that ceiling depending on the lender. Think of 75% as the top of the range, not the default.
That is why a score check belongs before you apply. Moving from the 660 band to the 700 band can change proceeds more than a year of rent growth. Neither tier is guaranteed. Every file is underwritten individually, and nothing here is a commitment to lend.
What Does the Math Look Like on Real Files?
Run the numbers on three rentals with the same 660 score. The figures below are modeled assumptions, expressed as points of appraised value, not market data. Assume closing costs of 3 points on each file. Each row uses the 65% hard money refinance cap.
| Scenario | New loan | Payoff | Costs | Net cash |
|---|---|---|---|---|
| Low payoff | 65 | 45 | 3 | 17 |
| Mid payoff | 65 | 55 | 3 | 7 |
| High payoff | 65 | 62 | 3 | 0 |
Same score, same cap, three very different outcomes. The payoff balance did the work, not the credit score. An investor who borrowed heavily against cost to buy and rehab may find that a 65% refinance barely covers the old note.
Now the exit route. Say the mid-payoff property is refinanced with a DSCR loan on a standard rental at a 75% LTV ceiling. The loan is 75 points, so cash is 75 − 55 − 3 = 17 points, if the rent supports it. The “if” matters. Cash-out raises the loan balance, which raises the payment and thins coverage. A thin ratio can shrink the loan before the LTV cap does. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Why Does Seasoning Decide Which Value Counts?
Seasoning decides whether the loan is sized on the new appraisal or on your cost. A hard money purchase usually has a short title history. Inside the seasoning window, some programs size a cash-out on documented cost basis, meaning the purchase price plus receipted rehab, rather than the appraisal.
For DSCR cash-out refinances, about six months of ownership, measured from title recording, is the common expectation across the network. Policy varies by lender. A strong appraisal at month three may not turn into cash at month three.
Two timing problems are worth planning for:
- Payoff creep. Interest and fees keep accruing while you wait. A file that looked like a clean payoff can end up with a bigger balance by the time the window opens.
- Maturity. Hard money terms run 6 to 18 months, interest-only, with no prepayment penalty. The note can mature before the cash-out window opens. Your options are a payoff-only refinance first, an extension if the lender offers one, or bringing cash to the table.
Compare the cost of carrying the note against the cost of two closings. Sometimes a payoff-only refinance now and a cash-out later costs more than waiting. Sometimes it costs less.
What Is the Difference Between a Payoff-Only Refinance and a Cash-Out?
A payoff-only refinance covers the old note and the costs, and nothing more. It is generally treated like a rate-and-term refinance. Any cash returned above that makes it a cash-out. That label drives which seasoning rule and which LTV cap apply.
In a DSCR exit, the rate-and-term line reaches up to 85% LTV, and it returns no cash at closing. A refinance that returns cash falls under the 75% cash-out ceiling instead. If your goal is only to escape the short maturity, a payoff-only refinance may be the cleaner path. Many investors also use a hard money exit refinance to move into long-term rental financing once the property is stabilized. Lendmire arranges that path through select lenders in its wholesale network.
Hard Money Cash-Out or DSCR Cash-Out: Which Returns More?
A DSCR cash-out usually returns more, but it has more tests to pass. The comparison below shows the program ranges.
| Factor | Hard money refinance | DSCR loan cash-out |
|---|---|---|
| Max leverage | Up to 65% of value | Up to 75% LTV |
| Term | 6-18 months, interest-only | 30-year fixed is the spine |
| What drives size | Property, plan, exit | Value, rent coverage, credit |
| Coverage test | None | 1.00 is a floor for select programs |
| Seasoning | Varies by lender | About 6 months |
| Credit | 620 minimum, conditions below 660 | 620 floor, around 660 common |
The DSCR figures are what the program allows, not a promise. Reserves are commonly around 6 months of PITIA, stepping up to about 9 months above $1,500,000. They vary by lender, leverage, and loan size.
On coverage, 1.00 is where many select programs start. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Clearing 1.00 does not mean the property cash flows. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. Real estate finance educators describe the same break-even logic, where a required ratio also caps loan size.
DSCR loans also run longer. A 30-year fixed is the spine. Extended terms, interest-only periods, and ARMs exist through select lenders in the network. There is no multi-year hard money option, which is why long runway means refinancing into a DSCR loan. For a broader overview of that product, read the complete DSCR loans guide.
What Changes by Property Type?
Property type can move the answer more than credit does. A few patterns to watch:
- Short-term rentals. A 75% ceiling applies to standard rentals on a cash-out, and a 70% ceiling applies to short-term-rental collateral. Expect a 640-plus score and about 12 months of hosting history.
- 2-4 unit properties and condos. These can step down in leverage on some programs.
- Larger loans. Standard DSCR programs run up to $3,000,000, and above $2,500,000 the network generally holds to 30-year fixed structures. Larger loans add reserve and credit requirements.
- Not eligible. Manufactured homes (single- and double-wide), log homes, and barndominiums fall outside these DSCR programs.
- First-time investors. Hard money leverage tiers are tied to documented completed projects, so experience affects your tier alongside credit.
Hard money collateral is non-owner-occupied residential property of one to four units. These are business-purpose loans on investment property, and underwriting stays centered on the asset.
Does an Agency Shortcut Help a Hard Money Buyer?
No. The delayed financing exception does not rescue a hard money purchase. The agency exception is written for cash buyers. The Fannie Mae Selling Guide lists it under cash-out refinances and says all other cash-out requirements still apply. A purchase funded by a loan secured on the property does not fit that exception. It is a conventional-lending contrast only, and it does not govern DSCR loans. Some DSCR lenders have their own rules for genuine cash buyers, which differ from the agency version.
How Do You Raise the Cash You Walk Away With?
You raise proceeds by shrinking the payoff, strengthening the appraisal, and lifting the score tier. The practical levers are:
1. Keep receipts. Rehab invoices support a cost-basis loan inside the seasoning window.
2. Wait for seasoning. Extra months can switch the loan from cost-based to value-based sizing, as long as the note does not mature first.
3. Present the rent clearly. For 1-4 unit rentals, the appraisal typically includes a rent schedule. The agency forms are Form 1007 for single-family and Form 1025 for small residential income property.
4. Check your score first. If you are close to the next credit tier, a few points can move the leverage band.
5. Pay down the note. A lower payoff raises net cash dollar for dollar.
6. Run both scenarios. Price the cost-basis loan and the appraised-value loan side by side before you commit to a timeline.
A larger down payment or a lower balance can lift the DSCR, but it never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
When Is This a Bad Idea?
A cash-out refinance is a poor fit when the net cash is thin or the new payment pushes coverage below your program’s floor. It is also risky if the exit depends on an appraisal you have not seen. More cash means a bigger payment and a thinner ratio. If rent barely covers PITIA, a larger loan leaves less room for vacancy and repairs.
Plan the use of the cash too. The Consumer Financial Protection Bureau describes how cash-out borrowers commonly use proceeds. Investors typically recycle the funds into the next purchase or rehab. That works when the first property is stable. It becomes risky when the first property still depends on the same cash.
Frequently Asked Questions
Can I get a hard money cash-out refinance with a 660 score?
Usually yes, on the credit side. The program minimum is 620, with additional conditions below 660, so 660 clears that line. Underwriting stays asset-based, so the property, plan, and exit still decide the outcome. Approval depends on lender guidelines, property review, and experience.
Why is my cash so small even though my appraisal came in high?
Your payoff and costs come out first, and seasoning may limit the value used. Inside the seasoning window, some programs size the loan on cost basis instead of appraised value. A 65% hard money cap or a 75% DSCR cap is a ceiling. Payoff, costs, and rent coverage can pull the loan well below it.
Does a higher score return more cash?
It can, mostly through the leverage tier on a DSCR loan. The common credit steps are 620, 660, 680, and 700, and 700-plus opens the strongest leverage. On a hard money refinance, cash is driven more by the payoff balance and the value cap than by the score.
Can the rent limit stop me before the LTV cap does?
Yes. A cash-out raises the loan balance and the monthly payment, which lowers the DSCR. If the ratio falls below the program’s floor, the lender may reduce the loan. Select programs start at 1.00, and a separate select-lender path takes coverage below 1.00 with leverage and terms adjusted.
What if my hard money note matures before I can cash out?
You generally have three paths: a payoff-only refinance now, an extension if the lender offers one, or bringing cash to cover the gap. Hard money terms run 6 to 18 months. Many investors then refinance into a long-term DSCR loan once the property is stable and seasoned.
Next Step
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. The illustrative calculator on the site offers a rough estimate of how rent and leverage interact, not a quote. Call 828-256-2183 to talk through your payoff and exit.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker that arranges DSCR and hard money financing through select lenders in its wholesale network, across 41 markets, including Washington, D.C. Lendmire does not lend directly. Program availability varies by state, and all loans are subject to lender guidelines and underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
See your offer in seconds. No credit pull, no obligation.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Investopedia: Hard Money Loan
2. Corporate Finance Institute: Cash Out Refinance
3. RMCRE: Debt Service Coverage Ratio
4. Fannie Mae Selling Guide B2-1.3-03
5. CFPB: Cash-Out Mortgage Refinance Borrowers Improve Credit Scores
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.