The most common Bakersfield refinance we see is not about pulling cash. It is an investor who bought an older home with short-term money, finished the work, placed a tenant, and now needs to replace an interest-only loan that is about to mature.
In short: LendingStreet refinances 1-8 unit Bakersfield rentals into DSCR loans that pay off hard money, bridge loans or an existing mortgage, qualified on the property's rent with no tax returns. Rate-and-term refinances go up to 80% LTV on some programs, 30-year terms are available, the standard minimum DSCR is 1.0x and the minimum credit score is 620.
Each starts from a different loan, but the goal is the same: a long-term payment the rent can carry.
Some investors also refinance a rental they bought with a personal mortgage. A DSCR loan sizes the payment on the property's rent, which can free up personal borrowing capacity for other needs.
This example is illustrative and not a quote. An investor finished a three-bedroom rehab in the Northeast and owes $268,000 on an interest-only hard money loan, paying about $2,568 a month in interest. The home appraises at $365,000 and is leased at $2,350.
A rate-and-term DSCR loan of $275,200 covers the payoff plus about $7,200 in closing costs, about 75% of value. Estimated principal and interest is about $1,922. With taxes of about $230 and insurance of $140, the total payment is about $2,292, for a DSCR of about 1.03x.
The new payment includes principal, so the balance starts going down, and the maturity date is no longer a deadline.
| Item | Hard money loan | DSCR refinance |
|---|---|---|
| Loan balance | $268,000 | $275,200 |
| Monthly loan payment | $2,568 interest only | $1,922 principal and interest |
| Taxes and insurance | $370 | $370 |
| Total monthly payment | $2,938 | $2,292 |
| Term | Short-term, maturing | 30 years available |
An appraiser will compare your finished home with recent sales nearby. In older parts of East Bakersfield, comparables can be mixed, with fully renovated homes selling next to homes that need work. Give the appraiser a list of improvements, permits and photos.
If the work included a garage conversion or addition, have the permit history ready. Unpermitted space may not count toward value or bedroom count.
Appraisers in Bakersfield often separate neighborhoods sharply. A renovated home in Westchester and one in Oildale may be similar inside but value very differently, so set your expectations by the closest recent sales.
Rate-and-term means the new loan pays off existing debt and closing costs, with little or no cash back. It allows up to 80% LTV on some programs, compared with 75% on cash-out.
If you want to recover your rehab money, compare a cash-out, keeping in mind the lower LTV limit and seasoning rules. Our Bakersfield cash-out page walks through that option.
A rate-and-term refinance is also a good fit when you simply want a better structure: a 30-year fixed payment instead of a balloon, or a lower monthly payment after rents have risen and your credit has improved.
Refinancing does not change ownership, so your assessed value is not reset. If you plan to move the property into an LLC at the same time, ask a tax adviser first, because a title change can be treated differently.
Your tenant's lease and AB 1482 status carry through the refinance. Qualify on the rent you actually collect now.
Keep copies of the lease and any rent increase notices, since the appraiser and underwriter will both ask for them.
Start the refinance well before your short-term loan matures. Appraisals, title and insurance can take a few weeks, and extensions on hard money loans can be costly.
Seasoning rules vary by program. Some look at how long you have owned the property, others at the date of the existing loan.
If the existing loan has a maturity coming soon, ask your current lender for an extension option in writing before you start, in case the appraisal or title takes longer than planned.
We need the lease, proof of rent, your payoff statement, insurance, and entity documents if the property is in an LLC. We do not need tax returns or pay stubs.
For statewide notes, see our California rate-and-term page. Call (877) 298-1001 or use the form below.
If the property was in a fix and flip loan, provide the final draw inspection and a list of completed work. It helps the appraiser and shortens questions during underwriting.
If the appraisal comes in lower than expected, a rate-and-term loan may need a small paydown to stay within LTV. If the DSCR is just under 1.0x, our sub-1.0 programs may help on some files.
You can also bring a small amount of cash to closing to improve the ratio.
Investors who used a bridge loan to buy a duplex or fourplex with vacancies refinance once the units are leased. The DSCR is based on the combined rent of all units, so a fully leased building can support a much larger long-term loan than the same building half empty.
Lease vacant units at market rent before applying. Under AB 1482, raising existing tenants later is limited, so the rent roll at refinance is close to what you will live with.
Yes. That is one of the most common uses. The new loan pays off the hard money balance and closing costs and qualifies on the property's rent.
Up to 80% LTV on some programs. Larger balances and 5-8 unit properties may have lower limits that vary by program.
No. Refinancing alone is not a change in ownership. A title change at the same time may be treated differently, so get tax advice.
It depends on seasoning rules, which vary by program. Start planning well before your short-term loan matures.
A lease helps, and some programs require one, but many use the appraiser's market rent estimate. A signed lease makes the file stronger.
Yes. With five or more properties, a blanket portfolio loan can combine them under one loan with one payment.
It can. Unpermitted space may not count toward value or bedroom count. Gather permit records before the appraisal.
Yes, on most programs the new loan can cover the payoff plus normal closing costs, within the LTV limit.
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