DSCR Loan Application

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DSCR or Debt-Service Coverage Ratio loans allow real estate investors to qualify based on rental income generated rather than personal income.

 These loans are ideal for self-employed investors, investors with multiple mortgaged rental properties, and investors looking to grow their portfolios rapidly.
One of the most effective ways to get started with investing in real estate is to utilize the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) method of real estate investing.

By using the BRRRR method of real estate investing you are able to buy properties and pull your equity out of those properties quickly. Your capital is always moving from 1 property to the next with a purpose of creating more cash flow and growing your real estate portfolio.

What is The Debt Service Coverage Ratio (DSCR)?

Debt Service Coverage Ratio, or the DSCR Ratio.

The Debt Service Coverage Ratio (DSCR) is the borrower’s capacity to repay or to service the monthly/annual debt payment on the property and if properly understood will help you buy and maintain a profitable real estate portfolio. The higher the DSCR ratio, the more net operating income is available to repay the debt and the greater the profit.

Simply, the DSCR ratio reveals if a real estate property is producing enough income to cover the principal and interest (mortgage)  or not. When a real estate investor applies for a new loan or refinances an existing mortgage, lenders evaluate the debt service coverage ratio as a very important indicator to calculate the maximum loan amount.

What is a DSCR loan program?

The DSCR loan is designed for Real Estate Investors and mortgage brokers who want to qualify for a mortgage based on cash flow generated by their investment property instead of using income proof, tax returns, employment information, etc.  Because a DSCR may quickly identify a borrower’s ability to repay without requiring income verification, lenders use it to help real estate investors qualify for loans. Some real estate investors might not be eligible for a standard loan because they deduct expenses from their properties.

Real estate investors can typically qualify for the debt service coverage ratio loan more easily since they do not need to provide proof of income in the form of tax returns, w2s  or pay stubs, which investors either do not have or don’t accurately reflect their real income due to the number of write-offs and business deductions.

What is a Good DSCR Ratio?

Most DSCR and rental income lenders demand that their clients properties have a DSCR ratio of at least .8 and is some cases 1.

A DSCR ratio of 1.00 shows that the investor will have enough cash flow from the property to pay off the loan. If the DSCR ratio is 1.20, the borrower can make loan payments with some extra cash flow. A percentage of 1.70 would provide even more cash flow for the borrower and so on. As an investor you would want a minimum DSCR ratio of at least 1 to know that your properties loan was being covered


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Our Ground Up Construction loan offers a streamlined financing solution to build single family, multi-family, and mixed use projects.

Different ground-up construction lenders offer different amounts here. CambridgeHomeLoan.com can lend up to 85% of lot purchase and construction costs, and up to 100% of construction cost of building if you are doing a construction project on a lot you own outright. (The loan to as repaired value, ARV must be 70%.) As you’re comparing  options, make sure you understand the fee structure of the loan, what set of closing costs you need to expect, and how underwriting requirements like credit score apply.

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