What are the different types of prepayment penalties for DSCR loans?
DSCR loans may have various prepayment penalty structures, including: * **Step-down prepayment penalties:** The penalty decreases over time (e.g., 5-4-3-2-1)[12]. * **Fixed prepayment penalties:** A set percentage of the outstanding loan balance. * **Zero prepayment penalties:** No penalty for early repayment[12].
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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...