DSCR Loan Analysis

[Gabe Bouldien]

Looking to add a 3rd SFR investment property to my portfolio. I tried to do a conventional 30yr fixed mortgage but was turned down by my normal lender due to the tax write offs over the last year with my other properties. Essentially I didn't make enough to qualify for this loan. I've heard some lenders will take 75% of future rental amount to help qualify. Is this true? I asked him about it and he said he didn't do that.

So I started looking at DSCR loans for this property in TN. The best quote I've gotten back is 7.25% 30yr, closing cost 5k, 25% DP requirement, 5 year Prepayment penalty. Credit is good at around 800. PP 350k, Estimated rent 3k, looking at PITI of $2150/month. Are these loan terms competitive? If not, who do I need to contact?

[AJ Wong]

Hello...Assuming an ARM? The rate sounds low..conventional mortgage primary purchases are in the high 6%'s-low 7%'s..The 5 year PPP is a little heavy as usually declining..5%.4%.3%..can also consider 'buying out' of the PPP usually around 1-1.5% of the loan amount upfront.. Typically DSCR is minimum 20-25% down, they will utilize a proportion of the current or proposed rental income to qualify.

I'd have a second look at the income for full documentation qualification as well..there might be some other ways to qualify income..including asset depletion..

I would strongly recommend to connect with @Joseph Chiofalo they are a nationwide investor focused direct lender. Good luck!