All Forum Posts by: Stacy Raskin

Funding a loan today that has an 85% LTV. Generally borrowers want to put less down so good to give them that an option if they fit listed criteria. 85% LTV can work depending on the property price, market rents and location.

I work with investors on rental properties in Chicago structuring the deals as DSCR loans.

There are lenders that have no seasoning requirements if you paid cash and are structuring as a DSCR loan. Loan minimum would be $150K with exceptions that can be made down to $100K.

@David Wasiloski, DSCR sounds like it would be a good option. DSCR loan rate and terms are generally grouped into 1-4 unit programs and then 5-8 unit programs. There are fixed 30 year options. DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Are you cash flowing the property? Is your DSCR ratio greater than 1-meaning are you cash flowing. Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. I've included an example below to help illustrate this.

4. Prepayment Penalty: Usually from 1-5 years. This is how long you have to hold the loan with out paying a prepayment penalty. The longer the prepayment penalty, the less impact is has on driving the rate higher. 

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350 Insurance = $100 Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100 Association Dues = $25

Total PITIA = $1875

Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

Lenders will generally let you hold Title in an LLC.

DSCR loans are a great way to supercharge your investment goals and net worth. Depending on the loan program, the mortgage will only be qualified off of your middle credit FICO credit score, down payment and market or actual rents.

More details:

• Loans available for purchase, cash-out and rate & term refinance
• 85% LTV for single family purchase only with a minimum middle credit score of 720. Purchase price up to $1.5M.
• Loan amounts up to $1,500,000. Minimum loan amount $100,000.
• LTV are up to 75% for cash out.
• Non-warrantable condos and condotels permitted.
• Rate buydown feature available.
• DSCR (lower of gross rent lease or Form 1007/216 rent divided by PITIA) as low as 1.0x. 
• Single family home purchases that will be short term rentals can be structured off of AirDNA with a 20% expense factor- for this program only no first time investors. 
• Qualify on Interest Only payment which is great for cash flow. 10 year interest only payments converting to 30 years principal and interest. Fully amortized fixed interest loan.

I work on DSCR loans in all U.S. states except for Arizona, Idaho, Iowa, Michigan, Minnesota, Nevada, North Dakota, Oregon, South Dakota and Utah. I look forward to hearing from you.

I have clients who are investing in short term rentals in Englewood and Venice, Florida. There are short term rental programs where lenders will use AirDNA data which is generally more favorable compared to appraiser rent surveys as far as more rent showing against expenses. That is one option to structure a loan. You can structure a loan with your personal income but then you have to be concerned with your personal debt to income (DTI) ratios. Another option is a DSCR loan.

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? Is your DSCR ratio greater than 1-meaning are you cash flowing. Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

@Thomas M., from what you wrote you would be able to qualify for a conventional (would consider your DTI (debt to income) ratio or a DSCR loan which will not consider your personal DTI. It will be structured on the rents covering the mortgages.

You mentioned small loans- what is the loan amount that you are looking for? Many lenders have $100-150K loan amounts minimums. 

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? Is your DSCR ratio greater than 1-meaning are you cash flowing. Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

As a mortgage broker, I work with different lenders doing delayed financing loans. The programs are created for investors who buy properties in cash and would like most of their cash back. This loan needs to be completed within 90 days from the purchase.

Program highlights:

• Get up to 80% of the cash you paid for the property. If improvements were made, the lender will consider based on the work done and what the appraisal comes back at for increased value to get more of the money you put back then the 80% purchase price.
• Credit scores as low as 620.
• Non-owner occupied Single Family, Multi Family up to 8 units property types
• Purchase Loan Amount – from $150K to $3,00,000. Exceptions can be made below and above- loans generally don't go below $100K.
• Can be structured as a DSCR loan or as a loan that considers borrower income.
• Fixed 30 year full amortized loan terms.
• Loans offered in all U.S. states except for Arizona, Idaho, Iowa, Michigan, Minnesota, Nevada, North Dakota, Oregon, South Dakota and Utah. I look forward to hearing from you.

@Lina Castano, as a mortgage broker, I have access to lots of DSCR options from different lenders. I also have non-DSCR options as well in Florida. I recently did a Miami cash out refinance.

@Alex Kreuzer, DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate. 

4. Are you cash flowing the property? Is your DSCR ratio greater than 1-meaning are you cash flowing. Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit.

I've included an example below to help illustrate this. 

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.