Infinity Commercial Capital

When borrowers explore loan options, they often encounter lenders’ marketing materials promising loan amounts “up to” a certain loan-to-value (LTV) ratio. However, it is not uncommon for borrowers to receive loan offers that fall below the advertised maximum. Let’s explore the reasons why lenders may offer less than the “up to” amount like debt service coverage ratio, creditworthiness, and property considerations. The Underwriting Process and Loan Limitations The underwriting process is an essential step in lending where lenders assess the borrower’s financial capacity and the risk associated with the loan. During underwriting, lenders evaluate various factors and may determine that offering less than the advertised maximum LTV ratio is prudent. This ensures responsible lending practices and mitigates potential risks. Factors that influence loan offers include: Debt Service Coverage Ratio (DSCR) One primary factor that influences a lender’...

Investing in rental properties is a popular way to generate passive income and build wealth over time. However, securing financing for these types of investments can be challenging. Traditional bank loans are often difficult to obtain, particularly for new investors or those with less-than-perfect credit. Fortunately, there is an alternative financing option that can help investors overcome these obstacles: DSCR loans. Benefits of DSCR Loans DSCR stands for Debt Service Coverage Ratio, and DSCR loans are specifically designed for rental property investors. Here are a few advantages of DSCR loans over traditional bank loans: Longer loan terms: Most bank loans for rental properties come with a 5-year term, which means that the borrower must refinance or pay off the loan after 5 years. In contrast, DSCR loans often have a longer loan term, such as 30 years, giving investors more time to pay off the loan and generate income from the property. Fixed interest rates: Many DSCR loans come with...