A Debt Service Coverage Ratio (DSCR) loan is designed specifically for real estate investors. Instead of qualifying based on your personal income and tax returns, the loan is approved based on the rental income the property generates. If the property makes enough rent to cover the mortgage, you can qualify. It is that straightforward.
The DSCR is calculated by dividing the monthly rental income by the monthly mortgage payment including principal, interest, taxes, insurance, and any HOA. A ratio of 1.0 means the property pays for itself. A ratio above 1.0 is ideal. Most lenders look for a DSCR of 1.0 to 1.25 or higher, though some programs are available for ratios slightly below 1.0.
Rob can do DSCR loans in the vast majority of states. The only states where DSCR is currently not available are Iowa, Minnesota, Nevada, New Jersey, New York, North Carolina, North Dakota, South Dakota, and Vermont.
Whether you are buying your first rental property or expanding an existing portfolio, DSCR financing is one of the most powerful tools available to real estate investors. Call Rob at 714-400-2317 or apply by clicking here.
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