Update for Cash Flow Investors: DSCR Rates back into the high 6% / low 7% range

[Kevin Hill]

Here is an update for those in the BP community keeping an eye on DSCR rates for rental properties. For ease, this is pasted from an email newsletter that went out today, Jan 31, 2024. Feel free to add comments or direct message me if you have specific questions!

DSCR rates in the low 7%'s on cash-flowing single-family properties. Plus, you have the option to pay a discount fee to lower it to our 6.875% floor rate or add an interest-only feature for increased cash flow and tax deductions - a true win-win!

ADDITIONAL DETAILS:

Typically, DSCR loan rates are 0.5%-1.0% higher than conventional rates, reflecting the additional risk perceived by the capital markets as this loan ignores DTI and focuses solely on DSCR. Right now, due to market inconsistencies, DSCR rates are nearly matching the rates offered on primary residences.

With a 5 year pre-payment penalty (PPP), rates are in the high 6% to low 7% range. If you prefer the ability to refinance sooner, the 2 or 1 year PPP rate in the mid to high 7% range is a great choice.

If you are preparing to buy properties in your market, using our 80% cash out refinance option is a great method to access capital from your current rental properties.