A DSCR mortgage, also known as a Debt Service Coverage Ratio mortgage, is a type of loan that allows borrowers to qualify based on their rental income without verifying their debt-to-income ratio (DTI) or employment. This means that borrowers can qualify for this mortgage solely based on the income generated from their rental properties.
With a DSCR mortgage, borrowers can access loans up to $3.5 million, provided they meet certain criteria. The minimum FICO credit score required is 620, ensuring that borrowers have a decent credit history.
Additionally, this mortgage allows for cash-out refinancing up to $1 million, giving borrowers the flexibility to access funds for other purposes. For purchases, borrowers can qualify for up to 80% loan-to-value (LTV) ratio, allowing them to finance a significant portion of the property’s value.
Furthermore, borrowers can also utilize the R&T (Rate and Term) option, which allows for refinancing up to 80% LTV. This provides an opportunity to adjust the interest rate or loan term without taking out additional funds.
The DSCR mortgage also offers the option for cash-out refinancing up to 75% LTV, providing borrowers with the ability to access additional funds while still maintaining a reasonable loan-to-value ratio.
Interest-only payment options are available with this mortgage, allowing borrowers to make lower monthly payments during the initial period of the loan. This can be beneficial for investors who prefer to maximize their cash flow during the early stages of property ownership.
In terms of adjustable-rate mortgages (ARM), borrowers can choose between 5/6 and 7/6 ARM options. These mortgages offer a fixed interest rate for an initial period, after which the rate adjusts periodically based on market conditions.
For those who prefer the stability of a fixed-rate mortgage, the DSCR mortgage offers 15 and 30-year options. This allows borrowers to choose a loan term that best suits their financial goals and preferences.
Lastly, the DSCR mortgage is suitable for borrowers who may have had past credit issues. The “0x30x12 OK” notation indicates that borrowers with a history of late payments or collections may still be eligible for this mortgage, as long as they have resolved any outstanding issues.
the DSCR mortgage is a flexible financing option that allows borrowers to qualify based on rental income, without the need for DTI or employment verification. With various loan amounts, LTV ratios, and repayment options available, this mortgage caters to the needs of investors and property owners looking to maximize their borrowing potential. Contact us for more information.
