DSCR Loan LTV (Loan-to-Value)
Loan-to-value (LTV) expresses the loan amount as a percentage of the property’s value. On DSCR loans, available LTV affects both eligibility and pricing and varies by program, property type, loan purpose, and the property’s DSCR. Specific LTV limits are set by each program and confirmed during underwriting.
Key Takeaways
- LTV expresses the loan amount relative to property value.
- Available LTV varies by program, property, and loan purpose.
- A property’s DSCR can influence available leverage.
- Cash-out scenarios often have different LTV limits than purchases.
What LTV Measures
Loan-to-value compares the loan amount to the property’s value. Lower LTV means more borrower equity in the transaction, while higher LTV means more leverage. Programs use LTV as one input for both eligibility and pricing.
What Influences Available LTV
Available LTV can depend on the loan purpose (purchase, rate-and-term, or cash-out), property type, borrower credit, and the property’s DSCR. Cash-out refinances often carry different leverage limits than purchases. Specific limits vary by program.
Frequently Asked Questions
- Does a stronger DSCR increase available LTV?
- On some programs, a stronger DSCR can support higher leverage, but limits are program-specific and evaluated alongside other factors.
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This article is for general educational purposes only and is not financial, legal, tax, or lending advice, a commitment to lend, or an offer to enter into a rate-lock agreement. All loans are business-purpose investor loans subject to underwriting, property review, investor guidelines, and applicable law. Program availability and terms vary by state and transaction. Simple DSCR is an assumed business name of WooHoo Mortgage LLC, NMLS #2347993.