Tag Archive for: Rental Properties

Look Into a DSCR Loan Today!

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Need a Loan for a Rental Property?

Do you need a loan for a rental property? Look into a DSCR loan today! A DSCR loan might be the perfect fit. It’s simple, fast, and doesn’t require your personal income to qualify.

Let’s break it down so you can decide if this loan is right for you.

What Is a DSCR Loan?

A DSCR loan (Debt Service Coverage Ratio) is based on how much income your rental property brings in. In short, if the rent covers the loan payment, you’re more likely to get approved.

Here’s what makes it different:

  • No personal income needed

  • Credit score requirements are flexible

  • Fast closing process

  • Great for new and experienced investors

Why Should You Consider a DSCR Loan?

It’s one of the best ways to fund rental properties—especially if banks have turned you down. Even better, it’s made for real estate investors like you.

Here are some top reasons to consider it:

1. No Pay Stubs or Tax Returns Required

Many investors write off everything on their taxes. Because of that, traditional banks might not approve their loan.

With a DSCR loan, the focus is on the property—not your job.

2. You Can Grow Faster

Since DSCR loans are based on the property’s income, you can keep buying more rentals—without hitting a limit based on your income.

Example:
If you buy a rental that makes $1,500/month, and your loan payment is $1,200/month, the property covers the debt. That means you can likely qualify for another deal too!

3. Perfect for Turnkey Rentals

Already have a property that’s ready to rent? DSCR loans work best on homes that are rent-ready.

Whether it’s short-term or long-term rental income, the numbers just need to make sense.

What Do You Need to Qualify?

Here’s what most DSCR lenders look at:

  • Rental income (current or projected)

  • Loan payment (including taxes and insurance)

  • Credit score (usually 640 or higher)

  • Down payment (often 20–25%)

That’s it! You won’t have to jump through all the usual hoops.

Real Example: Let’s Say You Want to Buy a Rental

You find a property that rents for $1,800/month. After taxes and insurance, your loan payment is $1,500/month.

$1,800 ÷ $1,500 = 1.2 DSCR

That’s a good number! Most lenders want to see a DSCR of 1.0 or higher, which means your rental pays for itself.

When Does a DSCR Loan Not Work?

Sometimes, a property doesn’t bring in enough rent to cover the loan. That’s when it might be time to:

  • Shop around for better rates

  • Put more money down

  • Raise the rent (if the market allows)

Even so, most deals have a way forward. You just need the right lender who knows how to structure it.

How to Get Started

Getting a DSCR loan is often easier than going through a bank. You just need to:

  1. Find a rental property with solid income

  2. Estimate the rent vs loan payment

  3. Apply with a DSCR lender who understands your goals

Final Thoughts

If you need a loan for a rental property, don’t let traditional banks slow you down. Look into a DSCR loan today! A DSCR loan focuses on the deal—not your income.

It’s fast. It’s flexible. And it helps you grow your rental portfolio with confidence.

So why wait? Contact us today to find out more! 

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How to Get a DSCR Loan in Three Quick and Easy Steps

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Today we are going to discuss how to get a DSCR loan in three quick and easy steps. Getting a DSCR loan doesn’t have to be complicated. In fact, with the right approach, you can close your loan quickly and start cash flowing from your investment property.

If you’re ready to secure funding without worrying about personal income requirements, follow these three simple steps.

Step 1: Get Your Numbers Ready

Lenders don’t ask for pay stubs or tax returns for a DSCR loan. Instead, they focus on your property’s income. That means you need to gather the right numbers before applying.

Here’s what you need:

  • Expected Rent Income – Find out how much rent your property can bring in each month. A lease agreement or a rental appraisal from a property manager can help.
  • Monthly Expenses – Lenders look at costs like mortgage payments, taxes, insurance, and HOA fees.
  • Loan Terms You Want – Decide whether you prefer a 30-year, 40-year, or interest-only loan.

Example: Sarah owns a rental property that earns $2,000 per month. Her monthly expenses, including mortgage and taxes, add up to $1,600. Since her rent covers her costs, she has a strong DSCR ratio, which makes her loan approval much easier.

Step 2: Find the Right DSCR Lender

Not all lenders offer DSCR loans, and those that do may have different requirements. You’ll want to shop around and compare terms.

Look for lenders who:

Example: Mark applied for a DSCR loan at his local bank, but they required personal income documents. He switched to a lender that focused on rental property loans and got approved in days—without personal income verification!

Step 3: Apply and Close Your Loan

Once you’ve gathered your numbers and chosen the right lender, it’s time to apply. Most DSCR loan applications require:

  • A completed loan application
  • A property appraisal
  • Proof of rent income (like a lease or appraisal report)

After you apply, the lender will review your numbers, order an appraisal, and finalize your loan. This process usually takes 2-4 weeksExample: Lisa submitted her DSCR loan application with all the needed documents. Because she had her numbers ready and worked with an experienced lender, she closed in just three weeks.

Get Your DSCR Loan Today!

By following these three easy steps—preparing your numbers, finding the right lender, and applying—you’ll be on your way to securing a DSCR loan fast.

Do you need more info on how to get a DSCR loan in three quick and easy steps? Contact us today to find out more! 

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What is a DSCR Loan and What Can You Do With It?

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What is a DSCR Loan and What Can You Do With It?

If you’re a real estate investor, you’ve probably heard about DSCR loans. But what is a DSCR loan, and how can it help you? Let’s dive in.

What is a DSCR Loan?

A DSCR loan, which stands for Debt Service Coverage Ratio loan, is designed specifically for real estate investors. This loan is never used for owner-occupied properties—only for investment properties.

The best feature of a DSCR loan is that it doesn’t rely on your personal income. That’s right, no tax returns, no W-2s, and no need to show any personal income. The focus is entirely on the property you’re buying. The lender looks at the income generated by the property, not your personal financials.

How Does a DSCR Loan Work?

The key to understanding a DSCR loan is knowing how the lender evaluates the property. They look at the rental income from that property to determine if it covers the expenses, including the mortgage, taxes, insurance, and any HOA fees.

A key term here is the DSCR ratio. This ratio compares the property’s income to its expenses. For example, if your property’s rent exactly matches your expenses, you have a DSCR ratio of 1. Lenders prefer a higher ratio, meaning the property brings in more income than it costs to operate.

Benefits of a DSCR Loan

There are several benefits to using a DSCR loan:

  1. No Personal Income Requirements: 

This loan type doesn’t care if you write everything off on your taxes or if you don’t have a steady job. It’s all about the property’s income.

  1. Flexibility: 

Whether you’ve just started your business or have been around for years, it doesn’t matter. DSCR loans are available even if you don’t have an established business.

  1. Variety of Options: 

DSCR loans come with many options, including three-year, five-year, 30-year, and even 40-year terms. There are also interest-only options to help keep payments low.

  1. LLC Friendly: 

You can purchase properties under an LLC, which can provide additional protection.

  1. Works Well with BRRR: 

If you’re using the Buy, Rehab, Rent, Refinance, Repeat (BRRR) strategy, DSCR loans are a perfect fit for transitioning to long-term financing.

Where a DSCR Loan Falls Short

While DSCR loans offer many advantages, they aren’t perfect for every situation:

  1. Higher Interest Rates: 

DSCR loans often have interest rates 1% to 3% higher than conventional loans. The market for these loans is more segmented, so shopping around is essential.

  1. Prepayment Penalties: 

Many DSCR loans come with prepayment penalties. If you sell the property within the first few years, you might face additional fees.

  1. Not for Owner-Occupied Properties: 

These loans are strictly for investment properties, so if you’re looking to finance a home you’ll live in, this isn’t the right choice.

  1. Credit Score Sensitivity: 

You need a decent credit score to qualify. Typically, lenders look for a score of at least 660, but higher scores can get you better rates and terms.

  1. Location Limitations: 

DSCR loans are often restricted to properties in larger communities. Smaller towns, especially those with populations under 25,000, may have fewer DSCR loan options.

Other Things to Know About DSCR Loans

  • Suitable for Short-Term and Long-Term Rentals: 

Whether you’re renting out a property long-term or using it as a short-term rental like an Airbnb, DSCR loans can be a good fit.

  • Not Dependent on Current Rent: 

You don’t need to have the property rented out to qualify. As long as you have a lease in place or are working on getting it rented, you can use a DSCR loan.

  • Covers Various Financing Needs: 

DSCR loans are available for purchases, rate and term refinances, and cash-out refinances.

Conclusion

DSCR loans are a powerful tool for real estate investors. They offer flexibility, don’t rely on personal income, and provide a range of options to suit different investment strategies. However, they do come with higher interest rates and other considerations, so it’s crucial to shop around and understand all the terms before committing.

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