Rates for DSCR loans are typically about one and a half to 2 percent higher than those for conventional investment loans. Let's explore why this is the case and whether a DSCR loan might be the right choice for you.
For example, with a conventional investment loan, the lender considers whether the individual can afford to make the housing payments even without rental income. DSCR loans, on the other hand, focus solely on the property's ability to generate enough income to cover the loan payments. Therefore, if the property experiences vacancies, the lender faces a higher risk, which is why the rates are higher.
Despite the higher rates, DSCR loans offer several advantages for investors:
Faster Approval Process:
The process to get pre-approved for a DSCR loan is typically quicker, meaning you can secure your financing and close on your investment property faster.
Streamlined Qualification:
Since these loans are based on the property's cash flow rather than your personal income, the qualification process can be less stringent.
Each investment scenario is unique, and the best loan option for you will depend on your specific circumstances. If you meet the qualifications for a conventional investment property loan, that might be your best route due to the lower rates. However, if speed and ease of acquisition are higher priorities, a DSCR loan may be more advantageous.
Qualify Based on Rental Income Only!
No Personal Income Needed to Qualify!
Interest Only Options Available!
Fund Into Corporation or LLC
No Pre-Pay Options
AirBnB's Allowed
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