More info About DSCR loans
Did you know that real estate investors can take advantage of new investment opportunities with an easy-to-qualify DSCR (Debt-Service-Coverage-Ratio) mortgage? Secure financing simply with the rent you are collecting or by using the average rental income in your area and there is no need to provide "traditional" income documentation such as tax returns, W2's, paystubs.
Finance your rentals without showing income. Just use gross rental income.?
?More info About DSCR loans:?
(What is it, and how it works)
In short, a DSCR loan enables you to purchase or refinance a rental propertywithout providing your tax returns, W-2s, pay stubs or other personal and financial documents that are required for a standard mortgage. In fact, most DSCR lenders do not verify your employment when you apply for the loan.
DSCR, is the ratio of cash available for what's known as servicing debt(generally principal and interest mortgage payments). ... The higher the ratio gets, the easier it becomes for that entity to obtain loan.
How does DSCR calculate loan amount?
The DSCR is calculated by taking the net cash flow divided by the annual debt-service payments at the requested loan amount. If the net cash flow is insufficient to cover the requested loan at the target DSCR, then the loan amount will be constrained by the minimum DSCR.
What is a DSCR loan?
DSCR stands for Debt-Service Coverage Ratio which is a formula used to determine if there is enough cash flow from rental income received on the property to “cover” or “service” the outstanding monthly debt on the property.
While it varies between lenders, typically anything between a 1.1 and 1.2 DSCR calculation is considered a sufficient cash flow to cover the outstanding monthly debt (meaning the rent is 110 to 120% of the monthly expenses). Monthly expenses are typically principal, interest, taxes, insurance and any dues if part of a condo association.?
The main benefit of these loans is lenders focus more on borrower credit and property cash flow and less about the borrower’s personal income. In a lot of ways these loans are considered “low” or “no doc” as compared to a more traditional conventional loan.?
The process and documentation requirements for DSCR loans are much less.?
Another benefit of a DSCR loan is that many lenders will allow borrowers to purchase properties in the name of an LLC or corporation which is typically something that conventional lenders will not allow.?
This is highly beneficial to investors as holding a property in an LLC has potential tax benefits to the investor and reduces exposure from a liability standpoint.?
Realtors: Are your investors struggling to qualify? Are they tired of conventional loans that require endless paperwork? Is DTI too high? A #DSCR loan is the program you've been waiting for.
What is DSCR? Debt-Service-Coverage-Ratio means the loan is qualified based on the cash flow/market rents of the subject property.?
To qualify, take the gross rents based on the lesser of market rents or lease agreement and divide it by the full amortization or interest only PITIA (Premium, Interest, taxes, insurance, association fees.)
?Ideal for: 1-4 unit properties, landlords, etc.
No income docs are required
?Min FICO 600
?TRID exempt
?Fast closings
?Leverage cash into buying more properties.
Leave a comment or DM and let's get started today!
(413) 271-0454
We're #NEXAMortgage, The Nation’s Largest Mortgage Broker.?We help real estate investors, airbnb owners and rental owners get a mortgage using cash flow from the rental property to qualify for a mortgage.?
#investor #dscr #investment #realestate #brynharrington #realtors #investorloans #property?