How We Qualify Our Clients
Unlock Capital was designed for Real Estate professionals which means we take a different approach to lending. Lending in our space still involves meeting minimum qualifications (eg: credit, value, reserves), underwriting to reduce risk (for the lender, their investors, and our clients) and servicing the loan to ensure timely payments. Each loan type has its own qualification requirements so let’s dive right in:
30yr Rental Loans
- A minimum credit score is needed to qualify and varies by Lender.
- Each loan is qualified using a DSCR (Debt Service Coverage Ratio) calculation versus a DTI calculation.
- Properties that do not meet a minimum value (usually $100K) are not eligible for financing.
- Each loan has to meet a minimum DSCR requirement (usually 1.10) and we’ll calculate that number when we are pricing your loan.
- Your loan will be qualified using the market rent (for purchases) and the actual rent (for refis).
- Each loan has a minimum reserves requirement (also called, Debt Service, Liquidity Buffer, etc) which is usually 8-12 months of PITI payments.
Purchase & Rehab/Fix & Flip Loans
- A minimum credit score is needed to qualify and varies by Lender.
- Each project has to meet a minimum ROI (Return On Investment) that is calculated using a formula that accounts for the purchase price, the amount of rehab and the value after the repairs are complete. We will review your project to ensure we meet the minimum ROI requirement.
- Your previous experience will determine your final pricing. Investors who have completed previous rehab projects will get more advantageous pricing (LTV, rate) than investors who haven’t completed any rehab projects. We will review your prior experience to ensure we get the best pricing options available.
- Your project will have to meet the minimum “as-is” and “after repair” values. We will review your project to ensure we meet those values.
- Each loan has a minimum reserves requirement (also called, Debt Service, Liquidity Buffer, etc) which is usually 8-12 months of payments.
