Definition
Refi is short for refinance. It means replacing or restructuring debt, often after a refurb, valuation change or product period.
How it affects a property deal
Refinance assumptions can change cash left in the deal, debt level, LTV, DSCR, interest cost, equity release and total wealth. In a BRRR case, refi is often the step that determines how much capital can be recycled.
What to check
- Valuation basis: purchase price, ARV or later projected value.
- Target LTV and lender maximum LTV.
- Interest rate and product length after refinance.
- DSCR or ICR stress requirements.
- Fees, early repayment charges and timing.