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What are the Key Benefits to "DSCR" Loans?




  • Easier qualification: DSCR loans are typically easier to qualify for than traditional loans, as lenders do not need to verify the borrower’s personal income 2.

  • More flexible terms: This type of financing can offer more flexible terms, when compared to traditional property loans. This might include longer repayment terms and lower interest rates 23.

  • Faster closing times: DSCR loans don’t require proof of income. Instead, borrowers can qualify based on the property’s cash flow, offering faster closing times and more flexible funding solutions 4.

  • No income verification

  • No job requirement

  • Down payment of only 20%

  • Can purchase under an LLC

  • No experience required

  • Cash out refinances allowed

  • Property can be vacant at the time of financing

  • Multiple property types may be eligible

  • Easier to qualify

  • Less documentation required

Please note that there are also some disadvantages to this type of loan that should be considered. For example, if your debt-service coverage ratio is too close to 1, you’re considered to be vulnerable and even a little drop in cash flow could cause you to default on your loan 1. It’s important to weigh the pros and cons before deciding whether a DSCR loan is right for you.


Author

Larry L. Gilmore

President & CEO

ClearBlu Capital Group



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