Dscr loan Co-signer

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Jason Taken
Lender 路 Chicago, IL 路 Member since 2021 路 424 posts 路 145 votes
2y

They will be on title.

2Reply
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  • Theresa Rivard
    OP
    Member since 2024 路 16 posts 路 5 votes
    1y

    Eric Estrada thank you

    0Reply
  • Theresa Rivard
    OP
    Member since 2024 路 16 posts 路 5 votes
    1y

    Stephen Caceda thank you. I have good credit and 20% down. But I look weak on paper. But I thought the whole idea of dscr was about the income from the property and no income verification of buyer. I make money just doesn鈥檛 show all of it

    1Reply
  • Stacy RaskinBusiness Member
    Lender 路 Member since 2022 路 1k+ posts 路 521 votes
    1y

    There are first time home buyer DSCR loans. You don't need a co-signer.

    Different mortgage brokers and lenders have access to different loan programs. Loan programs are specific to each state. Not every lender has every program option in every state. 

    More info on DSCR loans in case helpful: DSCR loans won't use your income to underwrite the loan.

    DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

    Here's a bit more in detail about how rates are calculated for DSCR loans:

    1. Credit score- the higher the best. 760-780+ generally gets best pricing for investment property loans with most lenders. From there every 20 point increment affect pricing differently. So for example, a 761 credit score will be in the 760-779 credit category, then going down to 740-759 and so on.


    2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

    3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

    4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

    I've included an example below to help illustrate this.

    So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

    See example below:

    DSCR < 1

    Principal + Interest = $1,700

    Taxes = $350, Insurance = $100, Association Dues = $50

    Total PITIA = $2200

    Rent = $2000

    DSCR = Rent/PITIA = 2000/2200 = 0.91

    Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

    DSCR >1

    Principal + Interest = $1,500

    Taxes = $250, Insurance = $100, Association Dues = $25

    Total PITIA = $1875 Rent = $2300

    DSCR = Rent/PITIA = 2300/1875 = 1.23

    If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable). If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.

    DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

    Happy to connect to discuss further. 

    [email protected]818-770-0340
    Bright Skyline518 Reviews
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    0Reply
  • Mark MunsonBusiness Member
    Lender 路 Orlando, FL 路 Member since 2022 路 440 posts 路 300 votes
    1y
    Quote from @Theresa Rivard:

    Stephen Caceda thank you. I have good credit and 20% down. But I look weak on paper. But I thought the whole idea of dscr was about the income from the property and no income verification of buyer. I make money just doesn鈥檛 show all of it


    With 20% down and your credit, as others have stated there is no need for a co-signor. DSCR loans look at nothing else beyond the DSCR, credit, and in some cases whether or not you own another property. Your income, tax returns, etc have no bearing. As others have suggested, you are dealing with someone very inexperienced. If a loan officer/account executive couldn't answer that with no ambiguity and full certainty, I would seek another lender or, at the very least, another loan officer within the company. 

    [email protected]407-900-8799
    CapSource LLC4.948 Reviews
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    0Reply
  • Theresa Rivard
    OP
    Member since 2024 路 16 posts 路 5 votes
    1y

    Stacy Raskin thank you very much! Very helpful!

    0Reply
  • Theresa Rivard
    OP
    Member since 2024 路 16 posts 路 5 votes
    1y

    Mark Munson Thank you I love this site it is so helpful to a rookie馃槉

    0Reply
  • Zach Edelman
    Lender 路 New York, NY 路 Member since 2022 路 1k+ posts 路 1k+ votes
    1y

    It depends on ownership of this other "co-signor." Is this loan/property being vested in an entity? If so, is the ownership 50/50, or another structure?

    0Reply
  • Bryan MaddexBusiness Member
    Lender 路 Charlotte, NC 路 Member since 2015 路 160 posts 路 76 votes
    1y

    Many lenders will let you add a credit partner to your LLC. They are not on the deed, only the LLC is on the deed. The credit partner needs 20% ownership of the LLC and then we close in their name.
    Some lenders will let you both be on the loan and use the Higher of the credit scores between you and your credit partner. 
    If you need to know a broker that can handle all of these situations, message me. I know a guy ;)

    Bello Mortgage powered by Coast2Coast Mortgage
    WebsiteView Page
    0Reply
  • Stacy RaskinBusiness Member
    Lender 路 Member since 2022 路 1k+ posts 路 521 votes
    1y

    There are lenders that allow first time home buyers to be first time investors with DSCR loans. These guidelines vary by lender. There are less lenders that do this but they exist. Happy to discuss further.

    More info on DSCR loans: DSCR loans won't use your income to underwrite the loan.

    DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

    Here's a bit more in detail about how rates are calculated for DSCR loans:

    1. Credit score- the higher the best. 760-780+ generally gets best pricing for investment property loans with most lenders. From there every 20 point increment affect pricing differently. So for example, a 761 credit score will be in the 760-779 credit category, then going down to 740-759 and so on.


    2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

    3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

    4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

    I've included an example below to help illustrate this.

    So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

    See example below:

    DSCR < 1

    Principal + Interest = $1,700

    Taxes = $350, Insurance = $100, Association Dues = $50

    Total PITIA = $2200

    Rent = $2000

    DSCR = Rent/PITIA = 2000/2200 = 0.91

    Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

    DSCR >1

    Principal + Interest = $1,500

    Taxes = $250, Insurance = $100, Association Dues = $25

    Total PITIA = $1875 Rent = $2300

    DSCR = Rent/PITIA = 2300/1875 = 1.23

    If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable). If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.

    DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

    [email protected]818-770-0340
    Bright Skyline518 Reviews
    WebsiteView Page
    0Reply
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