Frequently Asked Questions

A good DSCR varies depending on the industry, but generally speaking, a DSCR of 1.5 or higher is considered healthy. This means that for every $1 of debt, there is $1.50 of cash flow available to repay the loan.
A good DSCR ratio falls between 1.25 and 2.5. This range indicates that a property is generating enough income to cover its mortgage payments and other associated costs, while still providing a reasonable cushion in the event of an unexpected expense. A lower ratio may indicate that a property is at risk of defaulting on its mortgage, while a higher ratio may indicate that a property is not generating enough income to justify its purchase price. However, it is important to remember that the DSCR ratio is just one factor to consider when evaluating a property.
A jumbo loan is a mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency. In most of the country, the maximum loan amount that can be purchased with a conforming loan is $647,200. However, in some areas of the country, including parts of California, the limit is as high as $970,800.
When refinancing your mortgage, there are a lot of different fees and costs to consider. Some of these, like the loan origination fee, are typically rolled into the loan itself. Others, like appraisal fees or title insurance, are paid upfront. And then there are closing costs, which can add several thousand dollars to the total cost of your refinance. A no closing cost refinance is a loan that helps cover these costs at signing, so you don’t have to come up with the cash upfront.
An appraisal is an evaluation of property obtained from an independent certified professional. It is needed to help the lender to determine market value of the property you are purchasing, since the property will be used as collateral against the mortgage.
An Asset Depletion Loan is a type of mortgage that allows borrowers to use their liquid assets, such as savings or investments, to qualify for a loan. Asset Depletion Loans can be used to purchase a primary residence, second home, or investment property.
An FHA loan is a mortgage that is insured by the Federal Housing Administration. Because of this insurance, lenders are able to offer lower down payment requirements and more flexible underwriting guidelines.
ITIN stands for Individual Taxpayer Identification Number. It’s a unique number that the IRS assigns to people who don’t have a Social Security number. ITIN loans are special loans available to people with an ITIN number.
A good debt service coverage ratio is 1.25 in general. Anything higher is an ideal DSCR. Lenders want to see that you can pay off your debts while also earning enough money to cover any cash flow fluctuations.

An FHA loan is insured by a government agency, while a regular loan, also known as a conventional loan, is not insured or guaranteed by any government agency. There are some other differences between an FHA loan and a regular loan:

  1. FHA loans require a lower down payment, which is as little as 3.5% down, while conventional loans may require 10-20% down.
  2. Borrowers with lower credit scores may qualify for FHA loans, while conventional loans require a credit score of 620 or higher.
  3. FHA loans require mortgage insurance, which protects the lender in case the borrower defaults on the loan. Conventional loans may also require private mortgage insurance (PMI) if the borrower puts less than 20% down.
  4. FHA loans have specific property requirements, including safety and livability standards. Conventional loans have fewer property requirements.
One of the main disadvantages of an FHA loan is the requirement to pay mortgage insurance premiums (MIP) for the life of the loan. This can add significantly to the overall cost of the loan over time.
Interest rates will vary depending on the lender, but they are typically lower than traditional business loans.