Many Billings rentals are financed with local bank loans that amortize over 15 or 20 years and come due in five, or with short-term money used to buy and fix. When the balloon date approaches or the rehab is done, a rate-and-term refinance can reset the property on a longer, steadier loan.
In short: LendingStreet offers DSCR rate-and-term refinances on 1-8 unit rentals in Billings and Yellowstone County to pay off bank balloon loans, hard money, bridge or seller-held notes. Rate-and-term goes up to 80% LTV on some programs, 30-year terms are available, and the loan qualifies on the property's rent with no W-2s or tax returns. A longer amortization often lowers the payment enough to improve cash flow and the DSCR.
Community banks in Montana often finance rentals on commercial-style terms: a 15- or 20-year amortization with a balloon payment after three to five years, and renewal on the bank's terms at that time. Those payments can be high because principal is paid down quickly. A 30-year DSCR loan spreads principal over a longer period and removes the balloon.
Bank renewals can also require updated personal financial statements and tax returns. A DSCR loan qualifies on the property's rent instead.
Even when a bank offers to renew, the new terms may include a higher payment or another short balloon. Comparing a renewal against a DSCR refinance helps you choose the structure that fits a long-term hold.
This example is illustrative and not a quote. An investor owns a West End duplex with a $265,000 balance on a bank loan amortizing over 20 years, with principal and interest of about $2,258 a month and a balloon payment due next year. The units rent for $1,300 each, $2,600 in total. The property appraises at $390,000.
A DSCR refinance of $272,000, which includes about $7,000 in closing costs, is about 70% of value. Estimated principal and interest on a 30-year term is about $1,902. With taxes of $280 and insurance of $155, the payment drops from about $2,693 to about $2,337, and the DSCR rises from about 0.97x to about 1.11x.
The balance rises slightly to cover closing costs, but the longer amortization lowers the monthly payment, and the balloon risk disappears.
| Item | Bank loan today | DSCR refinance |
|---|---|---|
| Balance | $265,000 | $272,000 |
| Amortization | 20 years, balloon due | 30 years |
| Principal and interest | $2,258 | $1,902 |
| Taxes and insurance | $435 | $435 |
| Total payment | $2,693 | $2,337 |
| DSCR at $2,600 rent | About 0.97x | About 1.11x |
Investors who bought and renovated a Billings property with short-term financing can move it to a DSCR loan once the work is done and the units are leased. Rate-and-term refinances often have more flexible timing than cash-out refinances, though rules vary by program.
Plan the refinance well before the short-term loan matures, since appraisals can take longer in a nondisclosure state where comparable data is harder to gather.
Finish all work before the appraisal. Unfinished units can lead to an as-is value or a re-inspection, which slows the refinance.
Sale prices are not public in Montana, so appraisers rely on MLS and their own data. Provide a list of improvements, leases and any known sales of similar properties. A strong value lowers the LTV, which can improve your terms.
Ask your current lender for an exact payoff figure with per diem interest and any release fees, so the closing statement is accurate and the old lien is released promptly.
Montana property taxes depend on the Department of Revenue's appraised value and on how the property is classified. Under recent legislation, a qualifying long-term rental can be taxed differently from a second home or short-stay property, and the owner may need to file for that status. Verify the rules and deadlines with the Department of Revenue and the county treasurer.
If the reappraisal notice looks wrong, review it with the Department of Revenue before applying. A corrected value lowers the tax line and helps the ratio.
Montana has no transfer tax. Expect lender fees, appraisal, title insurance, escrow and recording, which can usually be included in the new loan if LTV and DSCR allow. Title companies typically handle closings.
If you have several properties at different title companies, pick one to handle the refinance and send them the existing title policies to speed up the work.
If the rent does not reach 1.0x at the loan you need, you can bring cash to reduce the balance, look at a sub-1.0 DSCR program if your credit and reserves are strong or raise rents at renewal first. We will show you the loan size the property supports.
Rents in Billings are often renewed on annual leases. Timing the refinance just after renewals at current market rent can make the difference on a tight file.
If several rentals have balloons coming due, a blanket portfolio loan can combine five or more properties, each 1-8 units, into one loan with one payment and release provisions for future sales.
Combining several balloon loans into one blanket loan also removes the need to negotiate renewals with a bank property by property.
Send the address, payoff amount, balloon date, rents and estimated value. Our investor loans are business-purpose loans on non-owner-occupied property. Call (877) 298-1001 or use the form below.
If the balloon date is close, say so up front so we can plan the appraisal and title work backward from that date.
Yes. A rate-and-term DSCR refinance can pay off a balloon loan and replace it with a 30-year term.
Usually, compared with a 15- or 20-year amortization, since principal is spread over more years.
Up to 80% LTV on some rate-and-term programs, subject to the appraisal and DSCR. Maximum LTV can be lower on 5-8 unit buildings and larger balances.
No. The loan qualifies on the property's rent. Credit, reserves and the property are still reviewed, and LLC borrowers are standard.
No. Montana does not have a transfer tax. Costs are mainly lender fees, appraisal, title insurance, escrow and recording.
Several weeks at least. Appraisals can take time in Montana.
Yes, with the note, payment history and a payoff figure. If the note was handled informally, the title company may need extra time to confirm the lien and its release.
Yes, across Yellowstone County and Montana. Rents and comparables are reviewed for the specific town, so share local leases and any known sales.
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