Innovative Mortgage Solutions

05/30/2023

The choice between a bridge loan and a DSCR loan for your investment property depends on your specific financial situation and investment goals.

A bridge loan is a short-term loan that is typically used to bridge the gap between the purchase of a new property and the sale of an existing property. It can also be used to finance renovations or to provide liquidity for other short-term needs. Bridge loans typically have higher interest rates and fees than traditional loans, but they offer flexibility and speed of funding.

On the other hand, a DSCR loan is a loan that is based on the debt service coverage ratio (DSCR) of the property. DSCR is the ratio of the property's net operating income to its debt obligations. DSCR loans are typically used to finance long-term investments and have lower interest rates than bridge loans.

In general, if you need short-term financing to bridge the gap between the purchase of a new property and the sale of an existing property, a bridge loan may be the better option. However, if you are looking for long-term financing for a stabilized property, a DSCR loan may be more appropriate. It's important to consider your specific financial situation and investment goals when making this decision. Consulting with a mortgage strategist can help you make the best choice for your situation.

05/30/2023

Five things to know about DSCR loans:

1. DSCR loans are based on the debt service coverage ratio (DSCR) of the property. DSCR is calculated by dividing the property's net operating income (NOI) by its debt obligations. Lenders typically require a minimum DSCR of 1.0 to 1.3 for a property to qualify for a loan.

2. DSCR loans are typically used to finance residential and commercial real estate properties, such as office buildings, shopping centers, and apartment buildings.

3. DSCR loans typically have longer terms than traditional commercial loans, ranging from 5 to 30 years. This makes them ideal for long-term investments.

4. Unlike traditional commercial loans, DSCR loans do not rely solely on the borrower's creditworthiness to determine eligibility. Instead, the primary focus is on the property's cash flow and ability to generate income.

5. DSCR loans may require a larger down payment than traditional commercial loans. Lenders typically require a down payment of 20% to 25% of the property's value, depending on the lender's requirements and the borrower's creditworthiness.

It's important to note that DSCR loans can have varying terms and conditions depending on the lender, so it's important to do your research and compare rates and terms from multiple lenders before choosing a loan.

05/05/2023

What does DSCR stand for and how do these loans work for investors?

👇Watch the video below to learn more👇

04/06/2023

Pending Home Sales-

Pending Home Sales, which measures signed contracts on existing homes, rose almost 1% in February…but you wouldn’t know that was good news if you listened to Diana Olick on CNBC. Diana did her best to put a negative spin on the report, saying that pending sales “eked out” a “small” gain, doing her best to make you dismiss the number. This is the same person that made a huge deal out of the 0.2% decrease in the median home price earlier in the week…and failed to mention it was not real appreciation and was skewed due to the mix of sales. She also forgot to mention that it was the third month of increases in a row and was MUCH better than expectations, looking for a 3% decline. These are signed contracts in February, when rates moved 1% higher. Diana explained that this is the reason we saw a much smaller gain, using it as a point of weakness. In reality, she should have explained that this shows the underlying strength in the market – Even though rates rose by 1% in February, we STILL saw an increase of almost 1% in sales! Sales are now down 21% from last year, so there is still more work that needs to be done, but it appears the worst is behind us.

03/30/2023

03/30/2023

FHFA House Price Index
The FHFA (Federal Housing Finance Agency) released their House Price Index, which measures home price appreciation on single-family homes with conforming loan amounts. Different than Case Shiller, it does not include cash buyers or jumbo loans. The FHFA reported that prices rose 0.2% in January! Year over year, home prices are up 5.3%. From the peak, home prices according to FHFA are down 0.63%...which is basically flat. Based on this, you can interpolate that the decline in Case Shiller is coming from higher priced homes where there is less demand. Additionally, there is likely cash discounts being offered, where buyers paying in cash are able to command a lower price, which is why Case Shiller is also lower.

03/23/2023

💲💲5 Day Close Line Of Credit!!💲💲
Yes, this LOC can be closed in as little as 5 days. If you have any questions, please don't hesitate to call, text, or direct message me. I would also appreciate it if you could share this opportunity with anyone you know who may benefit from it.

03/20/2023

NAHB Housing Market Index
The NAHB Housing Market Index, measuring builder confidence, rose 2 points in March after rising 7 points in February and 4 points in January. The index is now at a level of 44, which was 4 points above expectations and much higher than it was a few months ago when it was at 31, but still beneath the level of 50, which is the line in the sand between expansion and contraction. Looking at the internals: -Present conditions - increased 2 pts to 49 -Future outlook fell 1 pt to 47 -Prospective Buyers Traffic increased by 3 to 31 (third month in a row of increases) These figures are still in contraction territory being below 50, but are clearly rebounding and going in the right direction. It’s also important to note that the confidence is from builders, who are completing new homes. There is a difference between someone selling an existing home and a builder selling a new home. Existing home owners still receive a benefit as they are living there, even if they cant sell the home as fast as they want. Builders are much more sensitive, as they have carrying costs if they took out a loan and their capital is tied up from new projects. With Builders showing a big bump in confidence, it is positive sign to see.

03/12/2023

Low DSCR Ratio Loans Explained-

A low ratio debt service coverage ratio (DSCR) loan is a loan that has a lower DSCR than the lender's standard minimum requirements.

DSCR is the ratio of the property's net operating income (NOI) to its debt service or mortgage payments. A low DSCR means that the property's income is not enough to cover its debt service, making it a riskier loan for the lender.

Lenders may still approve these loans, but they may require additional collateral or charge higher interest rates to offset the increased risk.

03/03/2023

Jobless Claims
Even though hiring plans and job postings look softer, employers are clearly trying to hold onto the workers that that currently have. The Claims figures were basically flat from the previous week - Initial Jobless Claims, which measures individuals filing for unemployment benefits for the first time, fell 2,000 to 190,000 and remains beneath 200,000. Continuing Claims, or those that continue to receive benefits after their initial claim, fell 5,000 to 1.7M, but there has been a upward trend in this figure. While these are volatile numbers, it’s clear that once workers are laid off they are having a harder time finding new work.

03/01/2023

FHFA House Price Index
The FHFA (Federal Housing Finance Agency) released their House Price Index, which measures home price appreciation on single-family homes with conforming loan amounts. Different than Case Shiller, it does not include cash buyers or jumbo loans. The FHFA reported that prices were down 0.7% in December and only 0.1% after seasonal adjustments. Year over year, home prices are still up 6.6%. From the peak, home prices according to FHFA are down 2.7% raw, and only 1% after seasonal adjustments. Based on this, you can interpolate that the decline in Case Shiller is coming from higher priced homes where there is less demand. Additionally, there is likely cash discounts being offered, where buyers paying in cash are able to command a lower price, which is why Case Shiller is also lower.