All Forum Posts by: Peyton LaBarbera

You may access that equity via a HELOC. Up to 90% CLTV if you qualify. So if your first mortgage is $160,000, appraised value is at $250,000, you can access up to $65,000 on a HELOC .

The lender will have the property appraised. Let's assume it comes in at the $250K you think it will. The lender will take the $250K X 80% = $200,000. They will lend up to that amount to refinance your first mortgage without PMI...provided you qualify. Unless you owe more than $200K, you shouldn't have to put down more than your closing costs. Good luck.

Portfolio loan is one that is kept by the bank who originated it and does not sell the loan to Fannie Mae or Freddie Mac or securitize into mortgage back securities.  The lender keeps the loan on their own books and they don’t need to sell the loan to get the money back to re-capitalize. Most banks must sell most loans to the secondary market to be able to rinse and repeat the process of continuous lending. 

Two totally different terms that have nothing to do with one another. 

A Portfolio Loan simple means that the loan the lender makes is not sold, but held in their portolio...or on their books. If you go to a community bank and they make you a loan and they keep it on their books, it's a portfolio loan. It can be any type of loan...including a DSCR loan.

A DSCR Loan is an actual loan type. The term DSCR means "Debt Service Coverage Ratio" and it's the method by which commercial lenders determine cash flow. Think "Debt-to-Income Ratio" (DTI) for commercial loans. DSCR is actually the inverse of DTI. DSCR = Income/Expenses (the higher the number the better) while the consumer DTI is the inverse...Expenses/Income.

Commercial Banks traditionally include all kinds of things in the calculation...particularly on the expense side. A commercial bank will add in vacancy factors, repair reserve expenses, management expenses, etc. The relatively new DSCR loan, however, is much simpler. It only caculates DSCR as Monthly Rental Income / Monthly Pricipal + Interest + Taxes + Insurance + HOA...that's it. The DSCR loan for rental property is a very stripped-down version of the bank commercial loan way of calculating DSCR. It's great for scaling your rental empire as it ignores your "global cash flow" and only focuses on the cash flow for the subject property.

I hope that helped answer your question. Good luck!