Are there any prepayment penalties for DSCR loans?
Yes, many DSCR loans come with prepayment penalties, especially during the initial years of the loan term. These penalties can vary in structure, with some lenders offering options like step-down prepayment penalties (e.g., 5-4-3-2-1) or even zero prepayment penalty options[12, 13].
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Related Questions
What is a DSCR loan?
A DSCR loan, or Debt Service Coverage Ratio loan, is a type of mortgage designed for real estate investors. Unlike tradi...
How is the DSCR calculated?
The DSCR is calculated by dividing the property's net operating income (NOI) by its annual debt service (total principal...
What is a good DSCR ratio?
Lenders typically prefer a DSCR of 1.25 or higher, indicating the property generates 25% more income than needed for deb...