DSCR stands for Debt Service Coverage Ratio. DSCR is a metric used to evaluate the subject property's gross rental income to the property's monthly mortgage payment. Here is the formula:
Debt Service Coverage Ratio = Monthly Gross Rental Income / PITIA
This means that the loan is qualified on the cash flow or market rents of the subject property. No tax returns, W-2s or paystubs are required.
This is a loan for investors. It’s not meant for a primary residence, as the lender is looking at the property’s rent income to repay the loan. Sometimes referred to as "rental loans," these smart financial tools help mazimixe your rental property potential and increase your passive income. There are are flexible options for purchasing, refinancing, and cash-outs. Fixed, ARMS and interest-only products are available. Minimum down payment can be as low as 15%, but 25-30% is ideal. FICO score can be in the 600s, but 700+ will get you better terms. Foreign national borrowers are allowed.
Most lenders want the investor to evidence that they already own their primary residence or can provide a lease to evidence they have a primary residence. Some lenders will allow first time home buyers.
IND Mortgage LLC is a broker. I work with multiple lenders with differing requirements. Reach out to me to evaluate your scenario. I will connect you with the right loan product.
Pauline Lee | firstname.lastname@example.org | (508) 525-5415 | www.indmortgage.com