If you are looking for a DSCR loan for your rental property, there are several things to consider. These loans are ideal for real estate investors and are easy to qualify for. The qualification of these loans is linked to the rental income generated from the property. Keep reading and find out more about DSCR loans and their use for rental property.
Assess Whether A DSCR Loan is Right For You
As a real estate investor, you must assess whether a DSCR loan is ideal for your next rental project. Many investors consider a DSCR loan a small business loan. The best part about this loan is that it is convenient to qualify for compared to conventional loans. The potential downside of this loan might be that it comes with a high interest rate, which makes it expensive altogether.
With that said, if you have been unsuccessful at securing a conventional loan, then a DSCR loan might be your best option. Also, if you are looking for quick financing, then a DSCR loan is great. With DSCR loans, you can buy not one, not two, but many rental properties. If you have enough cash to pay at least 20% upfront, then you are all set to qualify for a DSCR loan.
Explore the Pros and Cons of A DSCR Loan
Before you speak to a lender for a DSCR loan for your rental property, you must know the pros and cons. When it comes to the benefits, the most amazing part is that lenders won’t take your personal credit score into consideration. You can also leverage flexibility on the rental property types that you can buy. You won’t have limits on the loans that you can take out.
The application submission process is surprisingly faster than any other loan. Also, there is less paperwork required with DSCR loans.
On the flip side of all these pros, you will be dealing with high interest and a high down payment.
Why is DCSR Great for Your Rental Property?
Most investors will limit the number of loans they have with you due to potential exposure purposes, as they want to limit their risks as well. You can find DSCRs with many different companies right now. However, there are no limitations on the number of properties that you own. These loans are available in a thirty-year fixed option, which is also the most common one.
The option of interest only is also available. The best part about this option is that the rates come down, which further increases the cash flow of your rental property.
Get Your DSCR Loan with AmeriSave
You might be surprised to know that you can leverage a DSCR loan to refinance your existing loan. If this sounds like something that you are looking forward to, then you might want to contact the team of AmeriSave, especially if you want to avoid taking out a less favorable loan. With AmeriSave, you don’t have to worry about late loan approvals and high rates.
