All Forum Posts by: Kristen L Garner

Have you considered a Bank Statement Loan? They are great for self employed or those with heavy handed tax write offs. We qualify you based on your deposited income into your bank account rather than your tax returns. You would need 10% down for a primary and 20% down for investment. OR as you have noted, DSCR will work. You would need to fund the entire loan via DSCR and if multi unit or STR comps are involved you'd most likely be looking at 25% down, but could potentially get it done for 20% depending on credit and DSCR ratio.

Hi Gregg, You can do a cash out refi with DSCR when rates go down. This will allow you to pull equity out and capture a lower rate. Keep in mind that a cash out refi comes with closing costs and your cash out LTV will most likely be 75% although there are rare cases where you can achieve 80%.

There are short term products out there for DSCR (ex: 1 or 2 year interest only loans for flippers or rehabbers) but generally speaking they are used for long term solutions with either 30 year fixed for 40 year fixed with the first 10 years being interest only. Closing timelines and fees are generally the same as conforming loans. The main differences are: you can close in an LLC, the rates are higher, they are good for single family or multi up to 10 units (conforming caps you at 4 unit multi family), and you can select to add a prepayment penalty to bring down the rate.

Hi Chaya, I live in CA but invest in IN (my hometown). Muncie is home to Ball State University and has strong economic roots in health care and manufacturing. If you are looking for referrals I'd be happy to provide you with some agent's contact info via PM. If you are looking for help with financing I can of course offer feedback on that front too. Best of luck! 

Is it a hard prepay? Most prepayment penalties are calculated as follows unless it's a hard prepay or a step down prepay:

Loan Amount Remaining x 80% = Balance to calculate penalty from

Balance x Note Rate = Annual Amount

Annual Amount / 2 = Max Prepayment Penalty

To be sure of the penalty amount you can get a payoff quote from your loan servicer. If you go to their online dashboard you should be able to download it without having to actually call in or wait for them to send it. If the prepay penalty is too severe and not worth it to gain access to your equity then a HELOC would be a great option. If you do decide to go conventional for a cash out refi your rate will almost certainly be higher than 5% - so HELOC may be a winner regardless!

I agree with @Stephanie P. Many investors I work with are pivoting to non-QM game plans and utilizing products like DSCR, Bank Statement Loans, or Asset Based Loans to do their Cash Out Refi at the 6 month mark instead of the 12 month mark.

Hi Guy, I'm a direct lender and would be happy to help run some numbers for you and take a look at your scenario. We have everything from conventional lending to DSCR lending. Congrats on successfully renovating and renting out your property!

Welcome! I'd be happy to connect. It sounds like your current portfolio is doing well.  Best of luck as you expand an grow.  I just recently started looking into San Dimas myself for a personal purchase - great area!

Hi Jaron, I'd recommend reviewing your finances with a lender to determine which path forward makes the most sense for your scenario. If you have enough cash on hand and DTI wiggle room, a conforming loan will give you the best rates. If your DTI is at its limit but you have cash on hand, you could use a nonQM product like DSCR that qualifies you based on the asset. If you don't have cash available to deploy for the downpayment and closing costs you could consider a cash out refi (you are good to go with the seasoning period) or a HELOC on your primary.

Keep looking, researching, and making offers! I know the feeling but you will get an offer accepted sooner or later. Did your lender give you DU report. Having this on hand can make your offers more attractive because it lets the sellers know you are a step above a pre approval - your file has passed an underwriting review. Best of luck!