Mortgage Do's And Don'ts
Mortgages can be tricky, and it's easy to make mistakes that can end up costing you dearly. That's why we've put together this list of Mortgage Do's and Do not's to help you navigate the process with ease - and a little bit of humor.
DO: Shop around for the best mortgage rates
DON'T: Assume your bank will give you the best rate just because you have a checking account there. Remember, loyalty is a two-way street.
DO: Have a budget in mind
DON'T: Get in over your head. Just because you can technically afford a million-dollar mansion doesn't mean you should buy one. You don't want to be house-poor and unable to afford groceries.
DO: Get pre-approved before house-hunting
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DON'T: Assume you'll be approved for a mortgage just because you have good credit. Pre-approval is important because it gives you a better idea of how much house you can afford and shows sellers that you're serious.
.
DO: Consider your future plans
.
DON'T: Assume you'll live in your new house forever. Life happens, and you may need to sell sooner than you think. Make sure you're not getting into a mortgage that you can't realistically afford if you need to move in a few years.
DO: Get pre-approved before house-hunting
.
DON'T: Assume you'll be approved for a mortgage just because you have good credit. Pre-approval is important because it gives you a better idea of how much house you can afford and shows sellers that you're serious.
.
DO: Consider your future plans
.
DON'T: Assume you'll live in your new house forever. Life happens, and you may need to sell sooner than you think. Make sure you're not getting into a mortgage that you can't realistically afford if you need to move in a few years.
DO: Read the fine print
.
DON'T: Sign on the dotted line without reading the terms and conditions. There may be hidden fees or clauses that could come back to haunt you later.
.
DO: Be prepared for unexpected expenses
.
DON'T: Assume everything will go smoothly. There may be unforeseen expenses, like a leaky roof or a broken furnace, that can quickly drain your savings. Be sure to budget for these types of surprises.
DO: Read the fine print
.
DON'T: Sign on the dotted line without reading the terms and conditions. There may be hidden fees or clauses that could come back to haunt you later.
.
DO: Be prepared for unexpected expenses
.
DON'T: Assume everything will go smoothly. There may be unforeseen expenses, like a leaky roof or a broken furnace, that can quickly drain your savings. Be sure to budget for these types of surprises.
DO: Have a good sense of humor
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DON'T: Take everything too seriously. Yes, buying a house and getting a mortgage can be stressful, but try to find the humor in the situation. After all, laughter is the best medicine for a stressful day.
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By following these Mortgage Do's and Do not's, you'll be well on your way to successfully navigating the mortgage process - with a smile on your face. Good luck, and happy house hunting!
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🧾🏢 DSCR Loans 101: What They Are and Why Real Estate Investors Love Them 💼📈
🧾🏢 DSCR Loans 101: What They Are and Why Real Estate Investors Love Them 💼📈
💰📊 DSCR Loans Explained: Why They’re the Go-To for Property Investors 🏠🧠
🧾🏢 DSCR Loans 101: What They Are and Why Investors Love Them
When it comes to scaling your real estate portfolio, few loan options are as powerful—and misunderstood—as the DSCR loan. If you’re an investor looking to qualify based on your property's income instead of your personal income, this might be the perfect tool for your next deal.
What is a DSCR Loan?
DSCR stands for Debt Service Coverage Ratio. This type of loan measures a property's ability to cover its own debt. Instead of relying on your W-2s, tax returns, or pay stubs, lenders focus on the income your investment property generates. That makes DSCR loans ideal for self-employed investors, gig workers, and anyone scaling their rental portfolio.
How Does DSCR Work?
Lenders use the formula:
DSCR = Net Operating Income / Annual Debt Service
For example, if your property earns $1,500/month in rent and your mortgage (including taxes and insurance) is $1,250/month, your DSCR would be 1.2. Most lenders look for a DSCR of 1.0 to 1.25.
Benefits for Real Estate Investors
· ✅ No personal income verification
· ✅ Streamlined underwriting process
· ✅ Great for portfolio expansion
· ✅ Works for short-term and long-term rentals
· ✅ Flexible LLC or personal ownership structures
Common Requirements
· Minimum DSCR of 1.0 (some go lower with higher rates)
· 20–25% down payment
· Property must be income-producing
· Decent credit score (660+ preferred)
Who Should Use a DSCR Loan?
This loan is perfect for:
· Buy-and-hold investors
· BRRRR strategy users
· Airbnb/short-term rental investors
· Self-employed landlords with multiple properties
📌 Pro Tip: Some lenders allow DSCR as low as 0.75 if you have strong reserves or put more money down. This flexibility can help you scoop up undervalued properties before they cash flow fully!
💬 Want to know if a DSCR loan is right for your next project? Let’s connect: https://billrapponline.com
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© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory
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