DSCR Loans
Introduction to DSCR Loans
Debt Service Coverage Ratio (DSCR) Loans are ideal for real estate investors looking to purchase or refinance rental properties. Unlike traditional loans, which rely on the borrower’s income, DSCR loans focus on the property’s income potential to determine eligibility. Savvy Mortgage Service specializes in helping investors secure DSCR loans, allowing them to leverage their real estate portfolios to finance new acquisitions or improve cash flow.
How DSCR Loans Work
DSCR loans are based on the income the property generates compared to the debt payments. A higher DSCR indicates that the property’s income is sufficient to cover the debt obligations. For example, if a property generates $2,000 per month in rental income and the debt payments are $1,500, the DSCR would be 1.33. Lenders use this ratio to determine whether the property will generate enough income to cover the mortgage payments, making DSCR loans a great option for investors.
Eligibility for DSCR Loans
To qualify for a DSCR loan, the property must demonstrate sufficient rental income to cover the debt service. Borrowers may also need to meet other requirements, such as a minimum credit score and a solid financial profile. At Savvy Mortgage Service, we assist real estate investors in understanding the DSCR ratio and ensure they meet the eligibility criteria.
Benefits of DSCR Loans
The main benefit of DSCR loans is that they allow investors to qualify based on the income potential of the property rather than personal income. This makes them a perfect option for investors with multiple properties or those who may not have traditional income sources. DSCR loans also typically offer competitive interest rates, depending on the property’s income.
Loan Terms and Interest Rates
DSCR loans offer flexible loan terms, often ranging from 20 to 30 years. Interest rates are typically higher than traditional mortgages but are competitive for investment properties. Savvy Mortgage Service works to ensure you get the best possible terms based on your investment goals and financial situation.
Property Types Eligible for DSCR Loans
DSCR loans are specifically designed for rental properties, such as single-family homes, multi-family units, and commercial properties. These loans are not typically available for owner-occupied properties. Savvy Mortgage Service offers a variety of DSCR loan options for real estate investors, ensuring that you have the right financing for your investment property portfolio.
Why Choose Savvy Mortgage Service for DSCR Loans
At Savvy Mortgage Service, we specialize in DSCR loans for real estate investors. Our team helps you navigate the complexities of these loans and ensures that your investment property qualifies. With our expertise and customer-focused approach, we help you make the most of your real estate investments.
