FAQ's
Frequently Asked Questions
- DSCR –
DSCR stands for Debt Service Coverage Ratio, and our DSCR mortgage is designed to help real estate investors and property owners finance their properties with greater flexibility and control. Unlike traditional mortgages that focus primarily on the borrower’s credit score and income, DSCR mortgages look at the cash flow of the property itself to determine the borrower’s ability to repay the loan.
With a DSCR mortgage, borrowers can secure financing for their properties based on the property’s actual income and expenses. This means that borrowers with lower credit scores or irregular income streams can still qualify for financing if their properties generate enough cash flow to cover the loan payments.
- Fix and Flip
Fix and flip loans are short-term, real estate loans designed to help an investor purchase and renovate a property in order to sell it at a profit—generally within 12 to 18 months. Some investors use more conventional loans and lines of credit to finance their projects, but most fix and flip loans are hard money loans from individuals or private investors.
Fix and flip loans are most often used to purchase residential properties at auction or foreclosure, to finance renovations and upgrades, and to cover other expenses associated with the ownership of the property.
- Fix and Hold A Fix and Hold Loan is credit used for property investors looking to buy and fix up a property to match quality living standards and then hold onto that property so as to rent the space out to tenants.
- Ground Up Construction A ground-up construction loan provides short-term financing for real estate investors and other borrowers who are interested in building a new property from the ground up. Borrowers can use this type of loan to finance either construction only or both the land purchase and the subsequent construction project.
Conventional Mortgages Conforming: These are traditional mortgages offered by banks and mortgage lenders. They typically require a down payment, and the interest rates can vary based on your credit score and financial history.
Conventional Non Conforming or NONQm: A Non-QM loan, or a non-qualified mortgage, is a type of mortgage loan that allows you to qualify based on alternative methods, instead of the traditional income verification required for most loans. Common examples include bank statements or using your assets as income.
Private Lending Loans: Essentially, the term private lender means that a non-institutional lender is loaning you money. They’re not tied to any major bank or corporation and they do intend on profiting from your loan. The way they do that is by charging interest and points on the loan.
Hard Money Loans: These are short-term, high-interest loans provided by private investors or companies. They are asset-based loans and are often used by real estate investors for quick financing.
Adjustable Rate Mortgages (ARM): ARMs have interest rates that can change over time based on market conditions. They often start with lower rates compared to fixed-rate mortgages, making them attractive for short-term investments.
Portfolio Loans: Offered by smaller banks or credit unions, portfolio loans are mortgages that are kept in-house rather than being sold on the secondary market. This gives the lender more flexibility in terms.
Commercial Mortgages: If you’re investing in commercial real estate, you might opt for a commercial mortgage. These loans are tailored for income-generating properties like office buildings or retail spaces.
Blanket Loans: Investors with multiple properties may choose blanket loans, which cover multiple properties under a single mortgage. This can streamline financing for those with diverse real estate portfolios.
Bridge Loans: These FHA loans are designed for investors looking to purchase a property that needs significant renovations. The loan includes funds for both the purchase and renovation costs.
Seller Financing: In some cases, sellers may be willing to finance the purchase themselves. This can be negotiated directly with the property owner and may offer more flexibility in terms.
- DSCR –
DSCR stands for Debt Service Coverage Ratio, and our DSCR mortgage is designed to help real estate investors and property owners finance their properties with greater flexibility and control. Unlike traditional mortgages that focus primarily on the borrower’s credit score and income, DSCR mortgages look at the cash flow of the property itself to determine the borrower’s ability to repay the loan.
With a DSCR mortgage, borrowers can secure financing for their properties based on the property’s actual income and expenses. This means that borrowers with lower credit scores or irregular income streams can still qualify for financing if their properties generate enough cash flow to cover the loan payments.
- Fix and Flip
Fix and flip loans are short-term, real estate loans designed to help an investor purchase and renovate a property in order to sell it at a profit—generally within 12 to 18 months. Some investors use more conventional loans and lines of credit to finance their projects, but most fix and flip loans are hard money loans from individuals or private investors.
Fix and flip loans are most often used to purchase residential properties at auction or foreclosure, to finance renovations and upgrades, and to cover other expenses associated with the ownership of the property.
- Fix and Hold A Fix and Hold Loan is credit used for property investors looking to buy and fix up a property to match quality living standards and then hold onto that property so as to rent the space out to tenants.
- Ground Up Construction A ground-up construction loan provides short-term financing for real estate investors and other borrowers who are interested in building a new property from the ground up. Borrowers can use this type of loan to finance either construction only or both the land purchase and the subsequent construction project.
Conventional Mortgages Conforming: These are traditional mortgages offered by banks and mortgage lenders. They typically require a down payment, and the interest rates can vary based on your credit score and financial history.
Conventional Non Conforming or NONQm: A Non-QM loan, or a non-qualified mortgage, is a type of mortgage loan that allows you to qualify based on alternative methods, instead of the traditional income verification required for most loans. Common examples include bank statements or using your assets as income.
Private Lending Loans: Essentially, the term private lender means that a non-institutional lender is loaning you money. They’re not tied to any major bank or corporation and they do intend on profiting from your loan. The way they do that is by charging interest and points on the loan.
Hard Money Loans: These are short-term, high-interest loans provided by private investors or companies. They are asset-based loans and are often used by real estate investors for quick financing.
Adjustable Rate Mortgages (ARM): ARMs have interest rates that can change over time based on market conditions. They often start with lower rates compared to fixed-rate mortgages, making them attractive for short-term investments.
Portfolio Loans: Offered by smaller banks or credit unions, portfolio loans are mortgages that are kept in-house rather than being sold on the secondary market. This gives the lender more flexibility in terms.
Commercial Mortgages: If you’re investing in commercial real estate, you might opt for a commercial mortgage. These loans are tailored for income-generating properties like office buildings or retail spaces.
Blanket Loans: Investors with multiple properties may choose blanket loans, which cover multiple properties under a single mortgage. This can streamline financing for those with diverse real estate portfolios.
Bridge Loans: These FHA loans are designed for investors looking to purchase a property that needs significant renovations. The loan includes funds for both the purchase and renovation costs.
Seller Financing: In some cases, sellers may be willing to finance the purchase themselves. This can be negotiated directly with the property owner and may offer more flexibility in terms.
Typically its 15-20% down but it could be Zero money down if one takes advantage of the 100% Financing Fix and Flip which requires 25-40% equity after renovation
It usually will be a little higher as a result of the risk involved. Real Estate investing is a business so it comes with a higher risk.
D.I.C.E – Debt, Income, Credit, Equity, and a hybrid of these. Some will not be required. Each situation is different. No experience, low credit score, and no cash may have an opportunity to get a loan.
Yes and no. There are specific qualifications that depend on your business model or each property. Each person, company and business model differ. There are usually options for everyone. Sometimes being resourceful will get you what you want and need.
It plays a key role for terms, rate, term of loan, etc. The lower the LTV or loan to value, the lower the risk, and the better the terms. However if the guarantor of the loan is considered high-risk then rate could be higher even though a down payment is higher then average.
The general main difference is the interest rate will be a lower on an adjustable-rate mortgage but the downside is the rate can go up at its adjustable date.
That depends on if you are doing it in an individual’s name or a corporate entity. If you are doing real estate investing in a corporate entity like an LLC, the number of mortgages you can have is usually unlimited.
The higher the credit score, the better the interest rate and terms. There are some instances in which you can acquire a loan with the lowest score depending on other circumstantial factors like the amount of your down payment and an explanation as to why the score is low. An investor lending money wants to ensure they will get paid back. Each borrower is case by case.
Yes. A commercial loan is a whole different product from a residential one. It has a lot of the same criteria but in most cases will require more data from the borrower and property itself. Also the closing date is usually longer due to the due diligence period is usually longer
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