Debt Service Coverage Mortgage
A DSCR loan is a type of non-QM loan basically meant for real estate investors. Lenders can use a DSCR to help qualify real estate investors for a loan easier because it can easily determine the borrower's ability to repay without verifying income!
The only requirement for a DSCR loan is your ability to pay mortgage payments through your property's rental income. We use a ratio called DSCR ratio to asses whether your property meets the criteria or not. The ideal DSCR ratio for getting approved for a loan is more than 1. The more the merrier!
How do you calculate DSCR?
Income: $2,000, Expenses: $500, Payment: $1,000
$2,000 - $500