The usual Baton Rouge rate-and-term file starts with a finished rehab and a short-term loan that is about to mature. The house is leased, the work is done, and the goal is simple: replace an expensive interest-only note with a long-term loan the rent can carry.
In short: LendingStreet offers DSCR rate-and-term refinances on 1-8 unit rentals in the Baton Rouge metro, paying off hard money, bridge loans or existing mortgages up to 80% LTV on some programs. The loan qualifies on the lease, with a 1.0x standard minimum DSCR, a 620 minimum credit score and 30-year terms available. No W-2s or tax returns are required, and LLC borrowers are standard.
In each case, the goal is a stable long-term payment that the rent covers, with little or no cash coming out.
A rate-and-term refinance pays off existing liens and closing costs, with little or no cash back to you. Because less equity leaves the property, some programs allow up to 80% LTV, compared with up to 75% on a cash-out. That extra room matters when the after-repair appraisal comes in a little light, which can happen in Baton Rouge neighborhoods where renovated sales are thin.
If you need money for your next purchase, compare this page with our Baton Rouge cash-out guide.
Rate-and-term also works for investors who simply want out of a loan with an adjustable payment or a short balloon, and who are happy with the equity they already have in the property.
This example is illustrative and not a quote. An investor finished renovating a Westminster ranch home and owes $196,000 on an interest-only rehab loan, paying about $1,960 a month in interest alone. The home is now leased for $2,050 and appraises at $270,000.
A rate-and-term refinance of $201,000, covering the payoff and closing costs, is about 74% LTV. Estimated principal and interest on a 30-year term is about $1,405. With taxes of $245, insurance of $290 and a $55 flood policy, the payment is near $1,995 and the DSCR is about 1.03x. The new payment is lower than the old interest-only payment plus escrow, about $2,550, and it now pays down principal.
Notice that the refinance replaces a payment that the rent could not cover with one it can. That shift, more than any change in loan size, is the purpose of most rate-and-term files after a rehab.
| Item | Rehab loan today | After DSCR refinance |
|---|---|---|
| Loan balance | $196,000 | $201,000 |
| Monthly loan payment | $1,960 interest only | $1,405 principal and interest |
| Taxes, insurance, flood | $590 | $590 |
| Total monthly | $2,550 | $1,995 |
| Term | Short-term, maturing | 30 years available |
| DSCR at $2,050 rent | 0.80x | 1.03x |
Start the refinance well before your short-term loan matures. A Baton Rouge file needs an appraisal, title update, insurance binder and, if applicable, a flood determination. Extensions on hard money loans often carry fees, so a 45 to 60 day head start is reasonable.
Have the lease signed and the tenant moved in before the appraisal if you can. A leased property supports both the value and the rent figure.
If the property sits in a flood zone, order the flood determination with the appraisal so the premium is known before final numbers are set.
The appraiser and underwriter both want to see what changed. Provide a list of improvements with costs, before and after photos and final permits. For homes in a flood zone, include the elevation certificate and confirm the work did not trigger the substantial improvement rule without the required upgrades. Open permits can delay title and closing.
A short written scope, with costs grouped by roof, systems, kitchen, baths and flooring, is easier for an appraiser to use than a pile of receipts.
A renovated home may be reassessed at the next four-year reappraisal, and you do not get a homestead exemption on a rental, so budget for the full assessed value. Insurance on a newly renovated home with a new roof is usually easier to place than on an older one; use the roof age to your advantage when shopping quotes.
If your insurance quote went up at renewal, shop it before you lock in the refinance. A lower premium flows straight into a better ratio.
If the rent does not quite cover the new payment at 1.0x, options include a slightly lower loan amount, a longer interest-only period on some programs, or a sub-1.0 DSCR program. If you own five or more rentals, a blanket portfolio loan can refinance them together and qualify on combined cash flow.
Bring the conversation to us early if you think the ratio is close. Small changes in loan amount, term or insurance can move a file from short to approved.
If you bought the property recently, some programs base the loan on the lower of your purchase price plus documented improvements or the new appraised value until a seasoning period has passed. Others allow the appraised value sooner when you can show the work and costs. Requirements vary by program.
This matters most for BRRRR investors who buy a distressed Baton Rouge house well below its finished value. Keep every invoice, draw record and permit, and share your purchase date and total cost up front. That lets us tell you early which program pays off your rehab loan in full.
LendingStreet refinances investor rentals across the Baton Rouge area. Our investor loans are business-purpose loans on non-owner-occupied property. Send your payoff statement, lease and rehab summary through the form below, or call (877) 298-1001.
A refinance that pays off existing loans and closing costs without taking meaningful cash out, qualified on the property's rent.
Up to 80% on some programs. Max LTV can be lower on 5-8 unit properties and larger balances.
Often, yes. Seasoning and value rules vary by program, so share your purchase date and rehab costs.
A lease helps support the rent figure. Some programs can use a market rent estimate from the appraisal.
Yes. A required flood premium counts in the payment and can lower the DSCR.
Often yes. Talk to your title company and tax advisor about the transfer.
Yes. We lend across the Baton Rouge metro.
If your goal is to pay off the rehab loan and keep the payment low, rate-and-term often allows higher leverage. If you need cash for the next deal, compare it with a cash-out refinance.
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