Alternative Lending Solutions
for Real Estate Investors
No One Will Work Harder to Get Your Hard Money Loan Funded!
7am-9pm
7 Days a Week
Cash-Out Refinance Hard Money Loans Starting at 5.99%
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
Minimum 1.20 or Greater
It’s critical when underwriting real estate and business loans and is a key part of determining the maximum loan amount a Lender is willing to give you.
Rental Income Divided By Expenses
(Mortgage, Insurance, Utilities, Property Taxes, HOA Fees, Reserves if Applicable)
EXAMPLE
Yearly Rental Income is $14,400
Yearly Expenses $8,400.00
$14,400 / $8,400=1.6
WORKS!
Yearly Rental Income is $9,000.00
Yearly Expenses $8,400.00
$9,000.00 / $8,400.00=1.07
DOESN'T WORK!
So, if your debt to income ratio of the rental property exceeds this calculation you will receive a lower LTV (Loan to Value) and thus less money on the cash out or you'll need more money to close.
