All Forum Posts by: Reid Chauvin

@Craig Morris - my experience with DSCR loans is different than what the poster above described as far as 'put down very little.' There is no benefit for a DSCR loan compared to a Conventional loan from an upfront cost perspective. Just the opposite: DSCR loans tend to have higher upfront costs than conventional - the lenders we broker with for DSCR require a 1% origination fee that is not charged on conventional loans. The interest rates are also higher on DSCR loans vs Conventional.

The benefit of the DSCR loan, from my perspective, is to qualify someone for financing an investment property purchase who cannot otherwise qualify based on their own personal income. I recommend working with a lender who offers both produces who can help determine which options you qualify for and compare and contrast the costs of each option for you.

@Raymond J. Rodrigues - I've assisted a handful of folks in Virginia, mainly around Northern Virginia (outside DC). Do you or someone you know need assistance? 

Welcome @Matthew Rich - House hacking is a great strategy for getting started, as you can take advantage of the lower down payment options. I think it makes sense to assess the property you already own first before deciding to sell it. If you held on to your current home, could it be a viable/profitable rental property with the current debt on the property? What about if you were to cash-out refi to tap into the equity so that you have some funds for the next purchase - how would the numbers look then with that new loan? 

@Christy Lin - when you refinance, part of the funds from the new loan will be used to pay off the HELOC. Depending upon the amount of equity in the home, you may be able to take cash out of the property as well. You can do this with a conventional loan as well as a DSCR loan. Conventional loan is likely to yield more favorable costs, if you can qualify. I recommend working with a lender who offers both loan options and who can compare and contrast the options for you.

@Scott Rovner - why do you have them as a co-signer, do you need their income in order to qualify for the loan? If you don't need their income, then you don't need any of the income documentation. If you do need their income, then you're going to need documentation verifying their income.

@Luke Ostergaard - for my LTR the deposit is the equivalent of 1 month's rent. For my MTR my deposit is 20% of 1 month's rent ($500). Feels low for sure, but that's what I was generally seeing around the Nashville market. Theoretically the mid-term renters won't live in the house as hard a long-term renters would...This is my first go at it, so we'll see if that holds true. 

@Luke Ostergaard - definitely more reasonable to collect rent on a monthly basis. You'll get some people on furnished finder who will want to rent for more than just a month or 2. Only modification I made from LTR lease to MTR was that utilities are included. I ask for a lesser deposit amount for MTR than LTR as well, as that's what the other listings in my market have. 

@April Hamm - that quoted bit does not make sense to me. What's the list price? Only thing I can think of without any additional context is that the conforming loan limit was exceeded and the previous person under contract didn't have enough cash to put down to bridge the gap or go Jumbo loan. 

@Jordan OBrien - I'm personally a proponent of putting less $ down. It can be tough/costly to tap into the equity of your home (you either have to get a HELOC, cash-out refi, or sell), so I prefer to keep what I can more liquid. You will be that much closer to having the cash to buy your next house.

@Obinna Kanu - how do you know your debt-to-income ratio is too high? Do you know if rental income on the prospective investment property is being factored into your debt to income ratio calculation? Some lenders unfortunately do not know all the levers to pull to get within an acceptable DTI. Other alternatives include larger downpayment, increase income on the application, pay down existing debts...more than happy to have a conversation on specifics!