The equity in a rental is not the amount you can withdraw. A refinance must leave the required equity in the property, pay off existing debt and cover transaction costs. In a DSCR loan, rental income can also limit the new loan.
Use the cash-out refinance calculator to estimate both constraints before planning what to do with the proceeds.
Start with the value limit
Value-based loan limit = property value × selected LTV.
A $400,000 property at 75% loan to value supports a $300,000 loan on this measure. That is the total new loan, not $300,000 of cash to you.
The 75% figure is an example, not a universal entitlement. For comparison, Lima One publishes a cash-out ceiling of up to 75% LTV. Your program, appraisal, credit, reserves and property can produce a lower limit. Another lender's published ceiling is not an offer from Funded by Daniel.
Check the income limit too
Our calculator sizes the refinance to the lower of the value limit and the amount supported by rental income at your entered DSCR target. For its fully amortizing model:
Maximum monthly principal and interest = rent ÷ DSCR target minus monthly taxes, insurance and HOA.
The selected rate and amortization then determine how much debt that payment supports. A higher appraisal does not solve an income constraint by itself.
A refinance with $61,000 of estimated proceeds
Use these planning inputs, which are not a rate quote or loan approval:
| Input | Assumption |
|---|---|
| Property value | $400,000 |
| Maximum LTV | 75% |
| Monthly qualifying rent | $3,500 |
| Interest rate and amortization | 7.5%, 30 years |
| Annual taxes and insurance | $4,800 and $1,200 |
| HOA | $0 |
| DSCR target | 1.25 |
| Existing debt payoff | $230,000 |
| Refinance costs | 3% of the new loan |
| Additional fixed closing costs | $0 |
At a $300,000 loan, principal and interest is about $2,098 per month. With $500 of taxes and insurance, total monthly payment is about $2,598. The resulting DSCR is approximately 1.35, so income supports the value-based loan in this model.
Estimated cash to you = $300,000 minus $230,000 minus $9,000 = $61,000.
What if rent supports less debt?
Keep every other input the same but reduce rent to $2,800. At a 1.25 target, allowable principal and interest falls to $1,740 after taxes and insurance. That supports about $248,851 of debt at the stated rate and term.
After the $230,000 payoff and 3% closing costs, estimated proceeds fall to roughly $11,385. The value has not changed, but the income limit has reduced the cash available substantially.
Check the payoff and the timing
Use a current payoff statement, including accrued interest and any applicable exit charges. Enter closing costs consistently so percentage fees and fixed charges do not duplicate one another. Escrows, prepaid items and required reserves may also affect the cash available at closing or the liquidity you need to retain.
Review refinance seasoning before assuming a recent renovation allows immediate borrowing against a higher value. Confirm program rules and appraisal treatment before committing to another purchase.
If the model shows cash required, the new loan does not cover the entered payoff and fees. It is not a cash-out result. Also run the new payment through the rental cash-flow calculator to see what the property retains each month. Send your refinance scenario for review when the assumptions are ready.