They have a balloon payment for the principal due in 10 years.

If I owe $150,000 principal I would choose to pay it over 30 years versus 5 years! 

Principal mortgage balance is $159,531.

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 < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).

I bought a 3/2.00 home in Tampa, FL in April 2022 for $245k at a 4.75% interest rate, I still owe $210K on the loan, my RE agent thinks it could sell for $280k ($70k in equity).

I’ve also dealt with loans where payments didn’t even cover all of the the interest owed each month—those deferred interest. 

I pay down the HELOC each month and would end up paying about $2,200 in interest over 13 months + the $50k principal.

Principal Paydown:  Cash Flow:  Tax Benefits: Savings from depreciation and interest deductions.For a deal to make sense, at least three of these components—home appreciation, cash flow, and principal paydown—need to be strong.

Some hard money lenders lend at pretty high LTVs, leaving little equity buffer to protect your principal.

We took out a HELOC on the property a few years back to do some extensive repairs and we've just now got what we owe on the HELOC paid off