DSCR Investment loans

[Robin C.]

Hi All, I'm Interested in finding out more about DSCR LOANS. PROS/CONS???

[Robin Simon]

Quote from @Robin C.:

Hi All, I'm Interested in finding out more about DSCR LOANS. PROS/CONS???

Generally (and there are lots of details and individual situations that differ) is that DSCR Loans vs. Conventional Loans are:

Cons - interest rates and closing fees ("points") are going to be a little bit higher (generally .75%-1% higher rate). Also prepayment penalties are typically included (DSCR loans with no prepayment are available, but would be more like 2-3% higher in rate in that case)

Pros: Main ones include:

-Do not need a W2 income, do not need tax returns

-No DTI calculation

-Can borrow in an LLC (with a partner, etc.)

-Much less loan size limits (can go bigger) or concentration limits (more than 10 loans)

-More flexible underwriting (good for short term rentals, quicker refinances, unique situations etc)