All Forum Posts by: Stacy Raskin

You will get a better rate on a first DSCR loan compared to an investment property HELOC. Investment property HELOCs are hard to find but a closed end 2nd mortgage on an investment property is going to easily be in the 10s and up for an interest rate.

More about DSCR loans:

DSCR loans won't use your income to underwrite the loan.

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

Happy to connect to discuss further.

 Based on the info you gave, it's competitive:

Sample pricing chart. Numbers in parenthesis is a credit to the transaction.

There are lenders that have a 5-8 program and some that go up to 10 units. Usually the minimum loan amounts are higher compared to a 1-4 program with a loan minimum often of $400K. Often rates trend a bit higher compared to the 1-4 unit program. 

More info on DSCR loans:

DSCR loans won't use your income to underwrite the loan. DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

Happy to connect to discuss further. 

Is this a cash out refinance or a purchase? Cash out rates will be higher for the same borrower profile compared to a purchase. What is the purchase price or estimated value for the refinance?

Some more info on DSCR rates and how they're calculated:

DSCR loans won't use your income to underwrite the loan.

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

Happy to connect to discuss further. 

I can do 3 months seasoning for #1 and use the new appraised value. 

I work with turnkey properties but getting funding in two weeks is tight unless you want to pay higher rates for the short escrow. 

I'll send you a direct message. 

You will get a better rate on a DSCR loan compared to an investment property HELOC. Investment property HELOCs are hard to find but a closed end 2nd mortgage on an investment property is going to easily be in the 10s and up for an interest rate.

More about DSCR loans:

DSCR loans won't use your income to underwrite the loan.

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

Happy to connect to discuss further. 

If an investment property, a fix and flip loan could work.

Some lenders will work with any level of investor experience, credit scores as low as 660 and can close in as little as 10 days. Also, there are loans that allow borrowers to finance up to 90% of the purchase and 100% of the rehab with up to 75% of the ARV.

Another good thing is interest only and 6-24 month loan terms.

Happy to connect to discuss further. 

Non warrantable condos and condotels that are investment properties can be bought or refinanced with DSCR loans. DSCR loans are a great way to supercharge your investment goals and net worth. Depending on the loan program, the mortgage will only be qualified off of your middle credit FICO credit score, down payment (if purchase) and market or actual rents.

Pricing Specials for Loans where the loan is submitted and locked in March

Purchase, Rate/Term & Refinance Cash-Out loans:

0.5% off the usual rate

More details:

• Loans available for purchase, rate and term refinance (no cash out) and cash-out refinance
• Credits score down to 620
• LTV are up to 75% for purchase and 70% for cash out.
• Cash out limits depend on property value, credit score and if the property is vacant.
• Rate buydown feature available.
• DSCR (lower of gross rent lease or Form 1007/216 rent divided by PITIA) as low as 1.0x.
• For experienced investors (one year of investor experience and own home), short term rentals can be structured off of 12 month short term rental history with 20% expense factor. If a purchase, AirDNA projected rents for the property address with 20% expense factor. Other loan programs don't have home ownership requirement.
• Inquire for additional details.

For nonwarrantable condos that have the pricing special, I work on DSCR loans in all U.S. states except for Alaska, Minnesota, Michigan, Arizona, Nevada, North & South Dakota, Idaho, Missouri, New Jersey, Vermont, New York, Virginia, Wyoming, Oregon and Utah. For other types of investment properties, I work on DSCR loans in all states except for Minnesota, Nevada, North & South Dakota, Oregon, Utah & Vermont.

Get Cash Out of Your Investment Property with no Personal Income Needed for the Loan

Pricing Specials for Loans where the loan is submitted and locked in March

This special is good for purchases, rate/term & refinance cash-out loans = 0.5% off the usual rate

DSCR loans are a great way to supercharge your investment goals and net worth. Depending on the loan program, the mortgage will only be qualified off of your middle credit FICO credit score, down payment and market or actual rents.

If you aren't looking to get cash out, you can also refinance out of a shorter term hard money loan or any loan to have a fixed 30 year mortgage term or use the special for savings to purchase an investment property.

More details:

• Loans available for cash-out
• Credits score down to 620 (for loans under $100K, middle mortgage credit score is 680)
• LTV are up to 75% for cash out.
• Cash out limits depend on property value, credit score and if the property is vacant.
• Non-warrantable condos and condotels permitted for loans above $100K.
• Rate buydown feature available.
• DSCR (lower of gross rent lease or Appraisal Form 1007/216 rent divided by PITIA) as low as 1.0x.
• Short term rentals can be structured off of 12 month short term rental history for loans above $100K.
• Fixed 30 year terms or fixed 40 year terms of 10 years of interest only payments followed by 30 years fully amortized for loans above $100K.
• Inquire for additional details.

For the pricing special, I work on DSCR loans in all U.S. states except for Alaska, Minnesota, Michigan, Arizona, Nevada, North & South Dakota, Idaho, Illinois, New Jersey, Vermont, New York, Virginia, Wyoming, Oregon and Utah.

I look forward to hearing from you.

Get Cash Out of Your Investment Property with no Personal Income Needed for the Loan

Pricing Specials for Loans where the loan is submitted and locked in March

This special is good for purchases, rate/term & refinance cash-out loans = 0.5% off the usual rate

DSCR loans are a great way to supercharge your investment goals and net worth. Depending on the loan program, the mortgage will only be qualified off of your middle credit FICO credit score, down payment and market or actual rents.

If you aren't looking to get cash out, you can also refinance out of a shorter term hard money loan or any loan to have a fixed 30 year mortgage term or use the special for savings to purchase an investment property.

More details:

• Loans available for cash-out
• Credits score down to 620 (for loans under $100K, middle mortgage credit score is 680)
• LTV are up to 75% for cash out.
• Cash out limits depend on property value, credit score and if the property is vacant.
• Non-warrantable condos and condotels permitted for loans above $100K.
• Rate buydown feature available.
• DSCR (lower of gross rent lease or Appraisal Form 1007/216 rent divided by PITIA) as low as 1.0x.
• Short term rentals can be structured off of 12 month short term rental history for loans above $100K.
• Fixed 30 year terms or fixed 40 year terms of 10 years of interest only payments followed by 30 years fully amortized for loans above $100K.
• Inquire for additional details.

For the pricing special, I work on DSCR loans in all U.S. states except for Alaska, Minnesota, Michigan, Arizona, Nevada, North & South Dakota, Idaho, Illinois, New Jersey, Vermont, New York, Virginia, Wyoming, Oregon and Utah.

I look forward to hearing from you.