Investor · San Antonio, TX · Member since 2016 · 76 posts · 25 votes
I am wondering if this can be a solution for investors with more than 10 investment properties.
They claim that "The property’s cash flow may be utilized for investment properties in lieu of conventional methods". I am interested in what the rate will be.
Lender · Tampa, FL · Member since 2020 · 182 posts · 90 votes
5y
Lots of lenders offer programs that use the anticipated rental income from the property instead of your personal income and do not have limits on the number of financed properties. It's referred to as a debt service coverage ratio loan. They're pretty simple. Usually it's 15-20% down and require a credit score above 720. Generally I've seen rates for the online DSCR lenders be higher than what a broker would offer. Terms for DSCR loans usually aren't too different from conventional loans.
Lots of lenders offer programs that use the anticipated rental income from the property instead of your personal income and do not have limits on the number of financed properties. It's referred to as a debt service coverage ratio loan. They're pretty simple. Usually it's 15-20% down and require a credit score above 720. Generally I've seen rates for the online DSCR lenders be higher than what a broker would offer. Terms for DSCR loans usually aren't too different from conventional loans.
Hi Mike - Like what Jeff said, DSCR loan are pretty simple to qualify for as no DTI or personal income is looked at in underwriting. Rates I'm seeing are in the low 4's to low 5's for 30 years. I some lenders will still look at your FICO score and investment experience to determine the interest rate. Most DSCR lenders will base their loan (Rates and Leverage) off the income of the subject property, verified by a lease agreement. If the property is vacant, lenders will base the loan off a 1007 report, which is a comparable market rent report for the subject property. This report is included in the appraisal order. Hope this helps!