•DSCR (Debt Service Coverage Ratio) loans are innovative financing solutions designed for real estate investors who want to qualify based on the property's rental income potential rather than personal income verification. These loans are perfect for investors building rental property portfolios, as they focus on the property's ability to generate sufficient cash flow to cover the mortgage payments.
Unlike traditional mortgages that require extensive personal income documentation, DSCR loans streamline the qualification process by analyzing the property's rental income against the proposed mortgage payment. This makes them ideal for self-employed investors, those with complex tax situations, or anyone looking to expand their investment portfolio without the constraints of traditional income verification.
frequently asked questions
What is a good DSCR ratio for loan approval?
We typically require a minimum DSCR of 1.0, meaning the property's rental income covers the mortgage payment. However, ratios of 1.2 or higher often qualify for better rates and terms.
Can I use projected rents for a vacant property?
Yes, we can use market rent analysis and comparable properties to determine the rental income potential for vacant or renovation-required properties.
Do I need landlord experience?
While landlord experience is preferred, it's not strictly required. First-time investors can qualify with strong credit and adequate reserves.
What types of properties are eligible?
Single-family homes, condos, townhomes, and 2-4 unit properties are eligible. The property must be used as an investment rental, not as a primary residence.
How long does the approval process take?
Our DSCR loan approval process typically takes 21-30 days from complete application to closing, depending on property complexity and appraisal timing.
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