DSCR Loans for Investment Properties
If you are an experienced investor or just starting out there are non-traditional ways to acquiring real estate property and enjoy the benefits that rental properties offer investors to build wealth.
What is a Debt Service Coverage Loan?
A DSCR loan is a non-qualified mortgage (Non-QM) loan designed specifically for real estate investors. Instead of the lender verifying income from the borrower to repay the loan they’ll use the DSCR to qualify the transaction.
What is a Debt Service Coverage Ratio?
The Debt Service Coverage Ratio is a ratio of the investment property’s monthly gross rental income divided by the mortgage payment, including property taxes, insurance, and association dues if applicable.
Example: if the rent for a home is $4,000 per month, the mortgage payment should be less. If it is not less there is a DSCR no ratio program with stricter requirements such as a high down payment and cash reserves.
DSCR loan types include fixed rate, adjustable rate, and interest-only. Loan payment terms are typically offered on 30-year and 15-year periods.
Advantages
- This loan helps investors to obtain the funding they need to purchase or refinance minus traditional income documentation
Interested in a DSCR Investor Loan? Discuss it with a 1stNWM Loan Advisor to understand the DSCR loan program as well as interest rate updates.
Ready to Get Started?
Talk to a licensed loan officer about your options — no obligation.