The events of the recent weeks are truly unprecedented in our lifetime. As the spread of Coronavirus ramped up in the US, we have come together as communities and as a Nation to prevent infections by staying apart. This presents new challenges for all of us, personally and professionally. Continue reading Tips for Connecting with Clients During the Coronavirus Pandemic
Have your goals set on establishing a real estate portfolio? This might be your year! Interest rates are staying low, rental prices are on the rise and home equity growth continues to climb. But deciding to buy a rental property isn’t something to take lightly. There are a lot of factors to consider, and finding the right financing plan is a big one. Continue reading How to Use Investor Cash Flow Loans to Build Your Real Estate Portfolio
Last year, the Federal Housing Administration (FHA) announced it would be increasing the limits they set on their home loan products. In other words, if you got approved for an FHA loan in 2019, you probably got to take advantage of more borrowing power. Fast forward to the present and the FHA has announced yet another increase for 2020, giving potential home buyers even more borrowing power in the new year.
Higher FHA Loan Limits in 2020
The U.S. Department of Housing and Urban Development (HUD) announced in December that the 2020 FHA loan limits would increase for most U.S. counties. The 2020 “floor” loan limit for single-family housing in most of the nation will rise to $331,760, nearly $17,000 more than the 2019 limit of $314,827. Counties that are considered “high cost” areas will see even higher loan limits. This “ceiling” loan limit will rise to $765,600, almost $40,000 higher than the $726,525 limit of 2019. The changes will go into effect on January 1, 2020. Continue reading Higher FHA and Conventional Loan Limits Means Better Pricing for Consumers
Buying a home can be an incredibly exciting process! If you’re embarking on this journey for the first time however, it can seem a little intimidating and even overwhelming. But fear not, first time home buyer–although there’s a lot to consider and several steps to take when buying a home, careful planning and educating yourself ahead of time can help make things go smoothly. Continue reading Preparing for the Home Buying Process
Investing in real estate can be an exciting opportunity. It gives motivated buyers the chance to diversify their investment portfolio, build wealth and potentially help them earn a bit of extra cash every month–but becoming a landlord isn’t without its challenges. Fortunately, finding the right type of financing doesn’t have to be one of them.
At Luxury Mortgage Corp, we’re pleased to offer home financing opportunities for real estate investors, including the innovative Investor Cash Flow program. This unique loan product is designed with today’s real estate investor in mind, providing competitive pricing on a mortgage that can help secure the purchase of a residential rental property.
Investor Cash Flow Mortgage – The Basics
Simple, Accessing Financing
The Investor Cash Flow mortgage program is a powerful financing tool that allows the cash flow on the property to be used to qualify for the loan. No tax returns or income verification is required, making it an accessible option, even for new investors.
No Limit to Number Financed
With this program, there is no limit to the number of properties financed, which could make it an ideal solution for established investors with a substantial portfolio.
Cash Flow Qualifier
Unlike other investment property loans, the Investor Cash Flow program allows the borrower to qualify based on the anticipated cash flow from the property once it is rented. There are a few additional guidelines that must be met and the debt service coverage ratio (DSCR) must be used to calculate the funds that may be used to qualify.
The DSCR is defined as the gross rent divided by the qualifying principal, interest, taxes, insurance and association dues (PITIA). The DSCR must be greater than or equal to 1. For example, if the gross rent is $1,000 and the qualifying PITIA is $700, you would calculate the DSCR by dividing $1,000 by $700, which would be roughly 1.43.
If there is already a lease in place on the subject property, the current rent will be used in the DSCR calculation. If there is no lease in place yet, the rent will be the market rental price, determined by an appraisal.
Want to learn more about the Investor Cash Flow program? Click the button below!
Benefits of the Program
Here are just a few great reasons to consider the Investor Cash Flow mortgage:
- Eligible borrowers can finance up to 80% of the property value
- Credit scores as low as 580 are acceptable
- No employment or income documentation required
- Loan amounts available up to $3,000,000
- Competitive pricing
- No limit to the number of financed properties
Expand Your Portfolio Beyond Fannie & Freddie’s Limits
With Fannie Mae, investors with 7-10 financed properties must meet strict credit score requirements as well as additional reserves requirements. Freddie Mac has similar restrictions and requirements for investors. With Luxury Mortgage’s Investor Cash Flow program, eligible borrowers have more freedom to obtain financing, even with an established portfolio of rental properties and/or second homes.
Ready to Learn More?
If the Investor Cash Flow mortgage sounds like a good solution for your investment property loan needs, don’t hesitate to connect with us! Give us a call toll-free at 888-379-0303 or contact us through our website.