What Is a DSCR Loan, and Why Does It Matter for Investors?
Categories: Blog Posts, Tips
If you’re a real estate investor, you may have heard about a DSCR loan. What is a DSCR loan? It stands for “Debt Service Coverage Ratio,” and it’s a type of loan that focuses on the income of the property, not your personal income. Why does this matter? Because it can make financing easier for investors who may not have a high personal income, or investors who use tax strategies that reduce their taxable income.
Imagine you have a rental property ready to go. With a DSCR loan, the lender looks at the income this property will bring in to cover the loan payments. If the income covers your costs, you could qualify! This setup is great for newer investors or for those who want to scale up without diving into personal financials.
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Is a DSCR loan right for you? Contact us today to find out more about DSCR loans!
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We also have free tools available! Download the DSCR Quick Calculator to see if it’s the best option for your investment properties!
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