You can only grow your portfolio so much using personal income. So why not spread your wings and get into the world of DSCR?
What is DSCR you may be asking?
DSCR stands for Debt Service Coverage Ratio.
Eligibility for DSCR loans is based on verifying the rental property’s income, not your personal income, tax returns and pay stubs.
Conventional loans rely on your income to support extra loan payments — so after a couple of properties, you max out your ability to borrow (unless you earn squillions).
That’s where DSCR loans come in…
They transform newbies into cigar wielding tycoons.
But while DSCR loans have advantages, rates are slightly higher so if your income isn’t maxed with other properties, a conventional loan might be better. We can help you decide.
What you need to access the world of DSCR.
A credit score of at least 660.
At least 12 months’ history of paying either mortgage or rent payments.
Total annual rent should cover your principal, interest, insurance, property taxes and HOA fees (if applicable).
A minimum of 20% downpayment.
Reserves to cover 6 months’ worth of payments.
Long and short term rentals like Airbnb are ok.
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