Are you currently looking for a more flexible mortgage-based solution that’s suited to your needs? Specifically, a loan program that doesn’t require tax returns to qualify as an investment property owner?
The Debt Service Coverage Ratio (DSCR) loan program would be an option worth considering.
What is a DSCR Loan Program?
A debt service coverage (DSCR) loan is one that qualifies borrowers through an investment property’s cash flow rather than the borrower’s income. DSCR loan programs — also known as investor cash flow loan programs — are frequently used by investors to qualify for mortgages and buy investment properties.
How the DSCR Loan Program works
As mentioned before, a borrower is qualified through an investment property’s cash flow as opposed to their income. So, as opposed to needing to report their net income due to the likely sizable expenses involved when writing their investments, it’ll be based on the signals determined by their properties DSCR.
What is the Debt Service Coverage Ratio (DSCR)?
The DSCR is based on the annual net income of the property and it’s debt obligations. When calculating the strength of it’s signal, it’s based on dividing that net income by the debt obligations. So say that the property in question your using to qualify has an annual rental income of $20,000. However, that property also comes with annual debt obligations $10,000. Based on these figures, the DSCR would be at 2.0. That means the property makes two hundred percent more based on the income than the outstanding debt obligations.
Why Failla Funding for a DSCR Loan Program?
With more than twenty years of experience, Failla Funding is more than capable of assisting you in getting the right loan program you need to help pave the path to success for you. We are experts at helping people handle almost any situation that may encountered during this process.
Contact us for more information!