As the real estate market continues to grapple with shifting interest rates and economic uncertainties, investors find themselves in a precarious position. Traditional lending solutions are becoming less favorable due to prolonged high-interest rates influenced by persistent inflation and Federal Reserve policies. For many real estate investors, especially those with loans nearing maturity, the question arises: how can one continue to own and acquire more assets in such a challenging environment?
Why Choose Ternus Lending’s DSCR Loans?
At Ternus Lending, we understand these challenges intimately. That’s why we’re seeing a rising trend in our Debt Service Coverage Ratio (DSCR) loan selections. Our DSCR program is designed not just to manage but to thrive in today’s economic landscape. In April alone, we closed 23 loans totaling $4.3 million, revealing significant insights into investor preferences and strategies.
Popular Trends in DSCR Financing
Our data from April shows a clear trend: investors are prioritizing flexibility and cash flow. The average loan had an origination fee of just 0.5%, with interest rates around 8.3% and out-of-pocket fees near $1,000. These figures reflect a strategic choice many of our clients make: they opt for a slightly higher interest rate to benefit from lower upfront costs and shorter prepayment penalties.
The Five-Year Interest Only Option
A particularly popular choice is our five-year interest only option. This allows investors to pay a fixed interest rate of 8.35% for the first five years without touching the principal. Post this period, the loan transitions into a traditional amortizing loan over the next 25 years at the same interest rate. This structure is not just a financial strategy; it’s a hedge against inflation, locking in rates while maximizing cash flow.
Success Stories
One standout case involved a client with a five-year-old portfolio loan who managed to refinance nearly $2 million through our program, moving away from traditional funding sources like Corvest. This not only provided them with liquidity but also repositioned their portfolio for greater stability and growth.
We’re Here to Help
At Ternus Lending, we’re more than just a lender; we’re your partner in growth. Our team of DSCR experts is expanding, and we’re equipped to support real estate investors across the nation. Whether you’re looking to manage a single property or a sprawling portfolio, our tailored solutions in Texas, Missouri, and Oklahoma, along with our nationwide services, ensure that your investments thrive even in uncertain times.
If you’re navigating the complexities of real estate investment and looking for a reliable lending partner, give us a call. Let’s discuss how we can support your goals with our innovative lending solutions.
