DSCR mortgage loans have many benefits, but there are still some drawbacks to pay attention to:
Higher Interest Rates
DSCR loans typically come with higher interest rates than traditional loans, as they are considered higher risk by lenders. It can make them less attractive to borrowers looking for low-cost financing options.
Potentially Risky
DSCR loans can be risky, because they require a property to generate enough income to cover the loan payments and other debt services. If the property is not generating enough income, the borrower may default on the loan.