Formula

Refinance Formula

A refinance formula estimates new loan amount from property value and target LTV, then subtracts existing loan balance and refinance closing costs. It models a scenario, not final loan terms or approval.

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Estimates are based on your inputs and assumptions. DealSharp does not provide financial, investment, legal, tax, or lending advice.

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refinance formula

Run the number, then pressure-test the assumptions.

Use this page to understand the metric directionally, then compare it against financing, reserves, repair risk, cash flow, and your own constraints.

Formula

Estimated cash before reserves = property value x new LTV - existing loan balance - refinance closing costs

Example

If property value is $350,000, new LTV is 75%, existing loan balance is $210,000, and refinance closing costs are $5,000, estimated cash before reserves is $47,500.

Use the formula inside a full deal model

DealSharp helps compare assumptions, debt service, cash flow, and risk flags so this metric is not reviewed in isolation.

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Plain-English explanation

How to read this number

The useful move is not treating one number as a final answer. Use it to decide which assumptions deserve more review, then compare the result against cash flow, financing, reserves, repair risk, and your own constraints.

Inputs required

Property value.
Target new LTV.
Existing loan balance and refinance closing costs.

Outputs explained

Estimated new loan amount.
Estimated cash before reserves.
Context for post-refinance cash flow review.

Assumptions to review

Property value is accepted for the scenario.
Target LTV and closing costs are estimates.
Lender review, appraisal, DSCR, reserves, and pricing are separate.

What this tells you

The formula estimates room between new debt and current debt.
It can help compare refinance scenarios.
It should be paired with post-refinance payment and DSCR.

What this does not tell you

It does not guarantee proceeds or terms.
It does not measure cash flow after the new loan.

Common mistakes

Ignoring refinance closing costs.
Using ARV without appraisal risk.
Skipping DSCR after changing debt service.

Questions investors ask

FAQ

Is refinance cash the same as profit?

No. Refinance cash is debt proceeds in the model, not sale profit.

What should be checked after refinance proceeds?

Review new debt service, DSCR, cash flow, reserves, and lender requirements.

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Run the full deal before deciding

This page helps with one metric or workflow. DealSharp is built for full real estate deal analysis: assumptions, financing, cash flow, repair scenarios, DSCR, cap rate, and risk flags based on your inputs.