Traditionally, the guidelines for qualification for investment property loans have been much stricter, with greater minimum down payment requirements, higher mortgage rates, and tougher employment history, debt to income ratio, credit score and history criteria. These made acquiring property loans for many investors difficult, if not impossible. In this blog we will look at creative financing for exceptional investors.
However, in times like these when the market contracts and volume shrinks, lenders get flexible and start thinking outside the box with innovative ways of structuring loans that allow investors to buy properties using less down payment and with far more lenient criteria. In fact, many borrowers that are good credit risks, don’t fit with conventional lending guidelines.
Some unique solutions are now available for those who are self-employed or for investors without the typical income or employment verifications. It is now possible to attain loans through other methods, including demonstrating investor cash flow from rental properties, through liquid assets, or bank statement deposits for example.
Debt Service Coverage Ratio (DSCR) loans for investors are based on a property’s cash flow, rather than verification of the investor’s income or assets, allowing an investment property loan to be obtained based on the value of a rental property. With a DSCR loan, lenders forecast how much a property can generate in rent based on either current lease agreements or anticipated rent based on the appraiser’s market rent. DSCR loans offer large loan limits, are available for multiple properties, and a number of other options such as interest-only or cashout loans, fixed or adjustable interest rates, and various lengths of term.
Non-QM loans allow borrowers to qualify for a loan using alternative representations to determine repayment reliability such as bank statements, liquid assets, or credit history. In addition, today’s lenders are also looking at ways to accommodate investors in specialty type properties. These are properties such as farms, hotels, carwashes and many others that are meant for basically only one use or limited use without a large capital investment to convert them for other purposes. Further, foreign nationals now have noteworthy opportunities with an ITIN (individual tax payer identification), or with a letter of good standing or international credit report.
At 1 Stop Lending, we provide lending solutions for investors with exceptional circumstances. When you are ready to purchase your investment property, 1 Stop Lending can help you with a fast and easy lending process along with excellence in pricing and service.
Request your quote today by visiting https://1stoplending.net.