The 30-year fixed rate DSCR loan is designed to assist real estate investors with their long-term rental properties. As an investor you might be focused on the monthly profit a tenant can provide, as well as the long-term appreciation of the property itself. These loans are only for investment properties, not primary residences.
DSCR stands for debt service coverage ratio and looks at your monthly income divided by monthly expenses. More specifically, it is calculated as your monthly rent you bring in divided by PITI (payment, interest, taxes and insurance). A DSCR above 1.0 means you are making a monthly profit, and a DSCR below 1.0 means you are losing money. Park Place Finance will lend on DSCR 0.80 and above.
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These loans differ from conventional loans in a number of ways. To qualify for a DSCR loan, we take a look at the property and the borrower. The property is vetted based on location and the forecasted monthly profit. The borrower needs to meet the minimum credit requirement, have sufficient liquidity, have a background check, but no pay stubs or W-2’s are required. We do not look at the borrowers DITI ratio. Another important thing to note is that a DSCR loan can vest into an LLC, rather than an individual’s name. They can also close much quicker than a conventional loan, which often takes 30-60 days to close. With a conventional loan, you are capped at 10 properties to your name. With a DSCR loan, there is no limit to the number of properties you can own.
Why Park Place Finance? When other lenders are too rigid in their pre-qualifications, or are moving too slowly for your needs, Park Place Finance can step in to fill the gap. Put our speed, responsive service and straightforward loan products to work for you.