Introducing Our DSCR 2nd Position Loan Option for Investment Properties

In today’s dynamic real estate market, investors with 1-4 unit properties need solutions that offer both flexibility and long-term financial strategy. If you secured an ultra-low-rate DSCR loans during the economic surge of 2020 or 2021, you’re in an advantageous position. Yet, accessing equity from your property without sacrificing that locked-in first position rate may seem challenging.

The answer? Our 2nd Position DSCR loan.

Why a DSCR 2nd Position Loan Is Ideal Right Now

With interest rates fluctuating and refinancing options limited, a DSCR (Debt Service Coverage Ratio) 2nd mortgage is an innovative way for property investors to leverage existing equity. Whether you need funds for renovations, expanding your investment portfolio, or simply wish to tap into available capital, this loan structure provides a strategic advantage.

Maintain Your Low 1st Position Rate

One of the most compelling benefits is that you can retain your low-rate first mortgage. This means your initial investment remains cost-effective while you access additional capital up to 85% Combined Loan-to-Value (CLTV). Unlike traditional cash-out refinancing, which would reset your mortgage terms at current higher rates, the 2nd position DSCR loan leaves your first mortgage untouched.

Key Features of Our 2nd Position DSCR Loans

Understanding the unique features of our DSCR 2nd mortgage option can help you make informed investment decisions:

1. Fixed Rate, No Surprises

Unlike Home Equity Lines of Credit (HELOCs), which often come with variable interest rates, our DSCR 2nd position loans feature fixed rates. This stability allows you to plan long-term without worrying about unexpected interest spikes.

Rates Starting at 8.25%: While higher than initial 2020 rates, these are highly competitive for a second lien position in today’s market.
Fixed-rate structure ensures that your repayment amount will not change over the life of the loan, adding predictability to your financial plan.

2. Flexible Loan Terms

Investors appreciate the ability to customize loan terms according to their needs. We offer:

20, 25, and 30-year amortization options: Tailor your loan repayment period to balance monthly cash flow with the total interest paid over time.
The flexibility of choosing a term that aligns with your investment strategy can enhance the stability of your real estate holdings.

3. Competitive Debt Service Coverage Ratio Requirements

Our DSCR requirements are designed to cater to a broad range of investors:

DSCR as low as 1.1x: This allows for broader qualification, accommodating properties that yield moderate cash flow relative to debt obligations.
By enabling access at a lower DSCR, we empower you to leverage properties that might not meet more stringent criteria elsewhere.

4. Streamlined Qualification Process

Securing a 2nd position DSCR loan shouldn’t mean facing the cumbersome documentation typical of first-position mortgages. That’s why we’ve simplified the process:

Drive-By Appraisal Qualifications: Speed up your approval process with a streamlined appraisal approach, avoiding extensive property inspections.
This method supports faster funding and minimizes disruptions to your operations.

Who Benefits from a 2nd Position DSCR Loan?

Seasoned property investors and new buyers alike can gain significant advantages from this loan option. Here’s why:

1. Long-Term Holders

If you are a long-term investor who locked in a low-rate first mortgage, you stand to benefit the most. Our 2nd position loan enables you to:

Tap into equity without sacrificing your initial low rate.
– Reinvest in other properties, fund upgrades, or build liquidity for future opportunities.

2. Portfolio Expansion Enthusiasts

Want to expand your investment portfolio? Accessing additional funds through a 2nd position loan provides the liquidity needed to purchase additional rental properties or renovate existing ones for increased rental income.

3. Investors Avoiding HELOC Pitfalls

HELOCs may be tempting for their flexibility, but their adjustable rates can lead to increased financial pressure. Our fixed-rate DSCR loans provide peace of mind, eliminating the risk of rate hikes that could erode profit margins.

Why Now Is the Time to Act

The current market landscape is ripe for leveraging second-position lending options. Holding off until rates drop significantly could mean missed opportunities. With our DSCR 2nd position loan:

Lock in current fixed rates that are lower than some HELOCs.
Maintain agility in your investment approach by utilizing capital while retaining your favorable first mortgage.

FAQs About DSCR 2nd Position Loans

What Does 85% CLTV Mean

CLTV (Combined Loan-to-Value) is a metric indicating the total loan amount in comparison to the property value, combining the first and second mortgage. An 85% CLTV means that your total mortgage debt, including both the 1st and 2nd positions, cannot exceed 85% of the property’s current value.

Are There Prepayment Penalties

Our DSCR loans may include prepayment terms, which we’ll clearly outline before closing. This allows you to plan for potential payoff strategies and refinancing options as needed.

What Types of Properties Qualify?

Our 2nd position DSCR loans cater specifically to 1-4 unit rental properties, covering single-family homes, duplexes, triplexes, and fourplexes.

Next Steps: Discover Your Options

Taking advantage of a 2nd position DSCR loan could be the financial pivot you need to enhance your investment potential. Whether you’re looking to renovate, reinvest, or simply access equity without compromising your original mortgage terms, our program is here to offer a customized solution.

Reach out today to explore your options for DSCR 2nd position mortgages or inquire about other loan products including rental property loans, fix & flip financing, and portfolio loans.