The lower of the current rents and market rents are used to determine DSCR, but some lenders will go up to something like 120% of market. 3.DSCR is calculated with principal, interest, taxes, insurance and HOA (if applicable) vs rents.

I tried looking into it from the forums, but the financial advisors I found start off at 10K-- we are not earning that much that it be better if we use the 10K to pay some of the principal of our mortgage.

After 5 years, I will have only paid interest, the principal will not have changed.

For those of you trying to “Time the Market” or trying to figure out the “Perfect Time to Buy”, either because you believe home prices will drop or because interest rates will drop (which they will in the very near future), I have a scenario for you.Consider these two scenarios, in both cases you have the EXACT SAME Principal & Interest Payment1.

Many lenders have brutal release fees to break up a blanket loan these days; many are 125% of the allocated principal balance.  

Even if rates went way up, I am confident you would still be ahead dodging all those fees and just paying down the principal after the PP falls off.Bottom line is this refinancing is too slim to be worth it right now.

Although rarely is it useful or beneficial to utilize (finance) that much additional principal and/or interest. 

The programs also attach all sorts of fees in order to finance the loan.  -- This is one fee among many which I found in the Hero program loan documents which could add quite a bit to your principal -- Program Administration Fee.

If Interest Only ARM, then your cash flows would be higher but your principal would remain the same and may be less desirable given that you would be looking to pay if off in full between 7 and 15 years.Cheers!

Also consider, you've gone past the first 5 years of the loan which are interest/principal reduction ratio wise the worst years.