This is a mortgage that you use to refinance or purchase a property to live in, to vacation in, or to rent out. This is what most people think of when someone says “mortgage”. They’re classified as either conventional, FHA, VA, or USDA.

It can be to purchase, to refinace the property into a better rate, or to borrow against the equity you’ve gained to get cash out for that bucket list vacation, to pay for college or student loans, to pay off credit cards, or really whatever else you might need some extra funds for.

These loans fall secondary to your primary mortgage. They’re used strictly to borrow against the home’s equity, or “to pull cash out of your home”. They’re a fantastic option when you have a great interest rate on your primary mortgage, or you’re close to paying it off, or if you simply don’t want the hassle of an appraisal and lengthy loan process. They typically close very quickly! Some as early as 3 days!

As long as you credit qualify, you can have access to this incredible option. This is an FHA product and follows the traditional FHA guidelines for qualification. That means you no longer need to be below 80% of the area median income, you can have as much money put away for renovations (or a rainy day), and as long as you’re buying a home and the payment fits the required debt to income ratio, you can utilize this option.

This does come with a slightly higher interest rate, so it isn’t the right option for everybody, but it’s a fantastic option to utilize. I’ve seen so many homeowners move in and immediately have a project that they wish they'd saved their money for.

This loan option is the fastest growing in popularity. The rental property’s income generation is what is used to qualify, not the borrower’s income as an individual. So, as long as you credit qualify and your rentals are generating income, DSCR is something you should definitely consider.

They can be used for single family residences being used for rentals, student housing, short-term rentals, and even (with some lenders) on condotels!

If you’re an investor or are looking into becoming one, we should talk!