DSCR loans for real estate investorsNameless Soph
Here is a great opportunity to get a mortgage with no need to use your tax returns to qualify if you use Debt Service Coverage Ratio (DSCR) loans especially designed for real estate investors to purchase an investment property.
The debt service coverage ratio is the property’s annual net operating income compared to its annual mortgage debt service. It is typically used by lending institutions to qualify a borrower for a real estate investment loan because it determines the borrower’s ability to repay the loan, also known as income coverage.
The DSCR loan is more appropriate and easier to qualify for because as a real estate investor you may often write off a lot of expenses on the rental properties. Other benefits include no limit on the number of financed properties bankable loans. Also, you can close these loans in a commercial entity such as an LLC.
The tricky thing about the DSCR loan is that each lending institution may calculate it differently, and the minimum requirements frequently vary. Usually, the calculation of DSCR is dividing PITIA (monthly principal, interest, taxes, insurance, and association dues) by the gross monthly rent.
While it varies lending institutions, typically anything above 1.2 is generally considered good, and anything above 1.5 is considered great. 1.0 means the investor is getting the same amount of rent as their monthly payments. Most lenders want to see that your rental property will pay for its self, but even if it is not we have options for you. Get in touch with us for details!
Here are some other benefits of choosing the DSCR program:
– No income or job history is required.
– No personal income calculations are used to qualify.
– No limit to the number of investment properties owned or financed.
– Low debt service coverage ratio qualifications of 1.0 (qualify on the cash flow of the property only).
– Close a loan in the U.S.-based corporation, LLC, and/or partnership.
– Loan amounts up to $5 mil.
– Unlimited cash out.
– Non-warrantable condo investments are allowed.
– Delayed financing options.
– Airbnb short-term rental income is allowed.
– As little as 20% down payment.
– Interest-only loan payment is available.
– Down to a 640 credit score.
– First-time real estate investors allowed.
– No reserves are required.
Should you consider yourself a real estate investor and interested in DSCR loans please do not hesitate to contact one of our experts today! We offer fast and free consultation, excellent customer service, competitive mortgage solutions, and tailored underwriting to our clients.