Guides and analysis on dscr loans for real estate investors.
Rental property loans carry a rate premium over primary residence mortgages. The gap runs 0.50 to 1.75 percentage points depending on loan type. Here is why the spread exists and what moves it.
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A DSCR loan qualifies on the rental property's income, not yours. Here is how the math works, what the full timeline looks like from application to wire, and the three documents that stretch most files beyond the baseline close.
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A standard DSCR purchase requires 20 to 25 percent down. Total cash at close typically runs 29 percent of the purchase price once origination fees and 6-month reserves are added. Here is how the four line items stack up on a real deal, and what pushes the requirement to 30 percent.
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A DSCR loan qualifies on the property rent, not your W-2s. That is the main advantage. The cons include a prepayment penalty that can cost $17,500 or more on a $350K loan, reserve requirements that lock up capital, and a rate spread above conventional that compounds over time. This post works through the numbers.
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DSCR loan rates are set by three variables stacked on each other: your debt-service coverage ratio, your loan-to-value, and your credit score. Here is the tier table and the math that shows which tier your deal actually lands in.
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Rent that covers the payment, 620+ credit, and 20-25% down: the seven DSCR loan requirements explained, with the exact numbers lenders look for and how to run your own deal in 60 seconds.
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