DSCR Loan docs question

Member since 2018 · 7 posts · 3 votes

I applied for a DSCR loan to cash out on a free and clear 4plex held in an LLC but the loan officer is asking for my personal bank statements, personal home mortgage statements. I don't understand why I need to submit these personal documents. My FICO is 812 and LLC has enough cash reserves and rent to service the loan. Should I submit the personal documents or find another mortgage company?

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Nick Velez

Lender · Member since 2019 · 250 posts · 219 votes

@Bridgett J Bell

Lenders need to know that you are on time with your mortgages hence why they ask for mortgage statements. While it is in an LLC, you still are guaranteeing the note so your credit worthiness is important.

As far as personal bank statement's, the cash out proceeds should be sufficient for reserves so I am not sure why they are asking for personal statements, unless rent receipt is deposited into your personal accounts.

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Madeline Malinovsky
Lender · TX CA AZ MA · Member since 2022 · 22 posts · 21 votes
4y
Hi Bridgett - that is odd. I've seen different DSCR investors with different "no doc" requirements, so I would recommend getting another opinion from another bank. If this is true DSCR, it should focus entirely on the debt-service-coverage ratio of the subject property.
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Greg Henderson
Flipper/Rehabber · Hattiesburg, MS · Member since 2020 · 59 posts · 25 votes
4y
The 3 local banks I use have all looked at my personal finances and the deal itself for a DSCR loan. They required I sign as a personal guarantor for the loan even though its for a LLC.
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Nick Velez
Lender · Member since 2019 · 250 posts · 219 votes
4y
@Bridgett J Bell
Lenders need to know that you are on time with your mortgages hence why they ask for mortgage statements. While it is in an LLC, you still are guaranteeing the note so your credit worthiness is important.
As far as personal bank statement's, the cash out proceeds should be sufficient for reserves so I am not sure why they are asking for personal statements, unless rent receipt is deposited into your personal accounts.
2 Reply
Bridgett J Bell
OP
Member since 2018 · 7 posts · 3 votes
4y
Quote from @Nick Velez:

@Bridgett J Bell
Lenders need to know that you are on time with your mortgages hence why they ask for mortgage statements. While it is in an LLC, you still are guaranteeing the note so your credit worthiness is important.
As far as personal bank statement's, the cash out proceeds should be sufficient for reserves so I am not sure why they are asking for personal statements, unless rent receipt is deposited into your personal accounts.

The rents are deposited into the LLC bank account.
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Stephanie P.Pro Member
Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
4y
Quote from @Bridgett J Bell:

Hi

I applied for a DSCR loan to cash out on a free and clear 4plex held in an LLC but the loan officer is asking for my personal bank statements, personal home mortgage statements. I don't understand why I need to submit these personal documents. My FICO is 812 and LLC has enough cash reserves and rent to service the loan. Should I submit the personal documents or find another mortgage company?
Submit the documents. All lenders have slightly different requirements. I have one that will require all mortgages on the credit report to show the most recent mortgage statement. You're probably still personally guarantying the loan, even though it's in an LLC, so they want to see that you personally have enough money for reserves. LLC's are just pass through entities for the most part so it's a little odd that they're asking for personal bank statements if you're showing enough reserves in the LLC account to cover reserves, but it shouldn't be a big deal.
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Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
4y
Quote from @Bridgett J Bell:

Hi

I applied for a DSCR loan to cash out on a free and clear 4plex held in an LLC but the loan officer is asking for my personal bank statements, personal home mortgage statements. I don't understand why I need to submit these personal documents. My FICO is 812 and LLC has enough cash reserves and rent to service the loan. Should I submit the personal documents or find another mortgage company?

Typically DSCR lenders ask for a bank statement showing proof of funds for closing costs. As for the personal home mortgage statements I would imagine they would like to see how much you owe on your property.
[email protected]818-269-7983
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Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
4y
Quote from @Erik Estrada:

Quote from @Bridgett J Bell:

Hi

I applied for a DSCR loan to cash out on a free and clear 4plex held in an LLC but the loan officer is asking for my personal bank statements, personal home mortgage statements. I don't understand why I need to submit these personal documents. My FICO is 812 and LLC has enough cash reserves and rent to service the loan. Should I submit the personal documents or find another mortgage company?

Typically DSCR lenders ask for a bank statement showing proof of funds for closing costs. As for the personal home mortgage statements I would imagine they would like to see how much you owe on your property.

But I am not clear as to what you mean by personal home mortgage statements in this situation. If you are not living in this 4-plex then It wouldn't make sense to see your mortgage statements on your primary.
[email protected]818-269-7983
LuxePrivate Investments LLC 572 Reviews
Website View Page
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Jonathan Taylor
Lender · Los Angeles, CA · Member since 2017 · 916 posts · 647 votes
4y
@Bridgett J Bell For institutional lenders who offer DSCR loan products, personal mortgage statements aren't required if you have an ontime payment history with mortgages. If a delinquent payment was recorded, this is not uncommon to ask for from the lender. Local banks have different qualifications standards than institutional lenders and vary by bank but this is not unheard of if this is the bank you are using. Personal bank statements may be requested if your loan has reserve requirements but since it is a cash out refi, some lenders use these cash out funds to qualify.
It doesn't hurt to shop in your area for national lenders. Just make sure you are ask a lot of questions and if you LO or broker doesnt explain everything clearly or is hard to get ahold of, Id shop around as customer service is a key aspect in this world.
Hope that helps and provide followup so we can best help you.
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Bridgett J Bell
OP
Member since 2018 · 7 posts · 3 votes
4y
Quote from @Erik Estrada:

Quote from @Erik Estrada:

Quote from @Bridgett J Bell:

Hi

I applied for a DSCR loan to cash out on a free and clear 4plex held in an LLC but the loan officer is asking for my personal bank statements, personal home mortgage statements. I don't understand why I need to submit these personal documents. My FICO is 812 and LLC has enough cash reserves and rent to service the loan. Should I submit the personal documents or find another mortgage company?

Typically DSCR lenders ask for a bank statement showing proof of funds for closing costs. As for the personal home mortgage statements I would imagine they would like to see how much you owe on your property.

But I am not clear as to what you mean by personal home mortgage statements in this situation. If you are not living in this 4-plex then It wouldn't make sense to see your mortgage statements on your primary.

My exact thought. The property owned by the LLC is paid off and I'm borrowing less than 50% of the value. I went ahead and submitted my personal mortgage statements and personal bank accounts although the LLC has enough cash.
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Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
4y
Strange. Maybe it's not a DSCR?
1 Reply
Rueben Sabog Jr.
Investor · Honolulu, HI · Member since 2018 · 2 posts · 0 votes
3y
Quote from @Erik Estrada:

Quote from @Erik Estrada:

Quote from @Bridgett J Bell:

Hi

I applied for a DSCR loan to cash out on a free and clear 4plex held in an LLC but the loan officer is asking for my personal bank statements, personal home mortgage statements. I don't understand why I need to submit these personal documents. My FICO is 812 and LLC has enough cash reserves and rent to service the loan. Should I submit the personal documents or find another mortgage company?

Typically DSCR lenders ask for a bank statement showing proof of funds for closing costs. As for the personal home mortgage statements I would imagine they would like to see how much you owe on your property.

But I am not clear as to what you mean by personal home mortgage statements in this situation. If you are not living in this 4-plex then It wouldn't make sense to see your mortgage statements on your primary.

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