Used on fix & flip, bridge, and construction loans. Total Cost = Purchase Price + Rehab Budget + soft costs.
Example
Buy $200k, rehab $50k → Total cost $250k. A 90% LTC loan funds $225k. You bring $25k plus closing costs.
Loan Mechanics
LTC (Loan-to-Cost)
Loan amount divided by total project cost (purchase + rehab).
More in Loan Mechanics
- DSCR (Debt Service Coverage Ratio)— The ratio of a property's net operating income to its debt payments — a 1.25 DSCR means th…
- LTV (Loan-to-Value)— Loan amount divided by the property's appraised value, expressed as a percent.
- ARV (After-Repair Value)— The projected appraised value of a property after planned renovations are complete.
- DTI (Debt-to-Income Ratio)— Your total monthly debt payments divided by gross monthly income.
- APR (Annual Percentage Rate)— The all-in yearly cost of a loan, including interest rate plus most fees.
- Note Rate— The interest rate written on your promissory note — what your monthly payment is calculate…