Loan Program
DSCR
Is a DSCR Loan Right for You?
A Debt Service Coverage Ratio (DSCR) loan is a financing option designed for real estate investors. Instead of primarily evaluating personal employment income, lenders assess a property’s rental income and its ability to support the proposed debt payments.
DSCR loans may be suitable for investors purchasing rental properties, refinancing existing investment properties, or expanding their real estate portfolios.
Whether you’re an experienced investor or exploring your first rental property, DSCR financing may offer an alternative to conventional mortgage qualification.
Benefits of a DSCR Loan
- Rental Income-Based Qualification: Eligibility focuses on the property’s rental income and debt service coverage.
- Alternative Income Documentation: Traditional W-2 forms or personal tax returns may not be required by certain programs.
- Portfolio Expansion: Financing may help investors acquire additional income-producing properties.
- Flexible Ownership Structures: Certain programs may allow qualifying business entities, including LLCs.
- Purchase and Refinance Options: Financing may be available for acquiring or refinancing eligible investment properties.
- Multiple Property Opportunities: Some programs allow financing across multiple investment properties, subject to lender guidelines.
DSCR Loan Eligibility Requirements
General eligibility requirements may include:
- Investment Property: The property must qualify as an eligible non-owner-occupied investment property.
- Rental Income: Actual or appraised market rent may be used to evaluate the property’s income potential.
- DSCR Evaluation: Lenders may calculate the ratio of qualifying rental income to required property debt payments.
- Credit Score: Borrowers must meet the program’s minimum credit requirements.
- Down Payment or Equity: Sufficient investment capital or existing property equity is generally required.
- Cash Reserves: Some lenders require additional funds to cover future mortgage payments and property expenses.
Check out what your investor ratio is by using our DSCR Investor Mortgage Calculator...
Our mortgage calculators are for demonstration purposes only and may not reflect actual numbers for your specific mortgage. Contact us and we will walk you through the best possible mortgage scenario for your specific needs!
The DSCR for this loan is
Monthly Payments
Principal & Interest (P&I)
$
Taxes & HOA
$
Homeowners Insurance
$
Debt Service Coverage Ratio
(Rental Income / Mortgage Payment)
Rental Income
$3,000
Monthly Mortgage
$3,000
DSCR
0.90
Estimated Taxes & Insurance
Property taxes are generally estimated to be 1.2% of the home's value, but may vary based on your location. Annual homeowners insurance is roughly 0.35% of the home's value but can change based on insurer. Your loan specialist can help you determine property tax and insurance rates in your area.
Estimated Payment
$ /mo
Loan amount
$
Down payment
$
Interest rate
Loan term
Property tax
Homeowner's insurance
$
HOA dues
$
Payment Breakdown
Amortization
Principal vs. Interest
Amortization Schedule Breakdown
Our detailed amortization schedule breaks down your mortgage payments, showing how they are split between interest and principal over the life of your loan.
Note: The actual monthly payment may be higher than what is shown here, as this schedule does not account for variable costs such as property taxes and home insurance, which are often included in your total mortgage payment.
- Principal payments: $$240,000 (the amount borrowed)
- Interest payments: $$297,554 (the cost of borrowing)
Compare Before You Commit
Use our mortgage calculators to understand your options before making one of life’s biggest financial decisions.
No matter what your situation is, there is a home financing solution for you. We are ready to guide you through your options and get you the best deal possible!
Reverse
Learn More!
Down Payment Assistance
Learn More!
Velocity Banking
Learn More!
Check out our other mortgage calculators
Access our top-rated mortgage calculators to expertly assess your financing options, compare various loan types, and make informed decisions for your home buying journey.
