No money? No problem! Become a landlord today. It's as easy as DSCR.

lemmy.dbzer0.com

No money? No problem! Become a landlord today. It's as easy as DSCR.

lemmy.dbzer0.com

ChihuahuaDog@lemmy.dbzer0.comM to

Housing Bubble Dos@lemmy.dbzer0.comEnglish · 2 months ago

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Housing Bubble Dos, the Second Coming is a community to discuss the bursting of the second great global housing bubble.

Glossary: RE - Sometimes used as an abbreviation for Real Estate

REIT - Real Estate Investment Trust, an organization that pools money from numerous investors, often small retail ones, and invests in real estate. Profits are shared but investors have little to no control on how the trust is run.

DSCR - Debt-Service Coverage Ratio, these are high interest mortgages that are primarily originated based on how much rent a home can command. Little is required of the person applying, usually a small down payment. On some of these types of mortgages even a person’s credit score or income may not be looked at. But the interest rate on these mortgages can start as high as 12%. If you’ve ever wondered how unemployed real estate influencers on Tik Tok wound up 30 rental homes, this is how. These unregulated high risk loans will most likely be the catalyst that sets off the second great housing market crash.

ARM - Adjustable Rate Mortgages, these mortgages start with a low monthly payment then “adjust” to a market rate payment and interest rate usually after 5 years. It’s one of the loan types, along with NINJA and Jumbo loans, that caused the first housing market crash in 2008. A homeowner can see their monthly payments double and sometimes even triple in a single month under these mortgages.

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