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Updated over 2 years ago on . Most recent reply
Buy and hold rentals
I am a retired woman investing in buy and hold real estate. I own 2 townhouse rentals and am house hacking on my primary house. I would like to buy another rental property but am having trouble with the debt to income ratio required by conventional loans. I have talked to a DSCR lender and their rates are currently around 10% which seems crazy to me. I have the 20% down, a high credit score and a good tract record. My problem is finding financing that works for me. Does anyone have any suggestions?
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#3 Private Lending & Conventional Mortgage Advice Contributor
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#3 Private Lending & Conventional Mortgage Advice Contributor
- Lender
- Austin, TX
The problem you are likely having with DSCR loans is that Kansas is one of the few states that outlaw prepayment penalties on rental properties, so DSCR lenders can only offer loans with no prepayment protection, which results in the much higher rates (Prepayment Penalties are a key tool for DSCR loans to give rate relief). A rough example of gov't regulation actually harming the people it is purportedly supposed to help.