Cash-Out Refinance Hard Money Loans Starting at 6.375%
Loans based on the DSCR (Debt Service Coverage Ratio) =Income minus expenses (taxes & insurance). Most lenders apply a maximum LTV (loan to value) ratio of 60%-80% on investment property.
THINKING LIKE A LENDER
UNDERSTANDING DEBT SERVICE COVERAGE RATIO 'DSCR'
NET OPERATING INCOME DIVIDED BY THE TOTAL DEBT SERVICE
Rental Income Divided By Mortgage, Insurance, Utilities, Property Taxes and Reserves.
WHY CAN'T YOU ACCESS ALL THE EQUITY IN YOUR RENTAL?
DSCR
Debt Service Coverage Ratio
It’s critical to understand how you can determining the maximum loan amount a Lender is willing to give you.
Rental Income Divided By Expenses PITI
(Mortgage Principle, Interest, Taxes & Insurance)
EXAMPLE
Monthly Rental Income $850.00
PITI $695.00
IT WORKS!
Monthly Rental Income $850.00
PITA $1150.00
DOESN'T WORK!
