Washington DSCR Loans
Everything You Need to Know
DSCR loans are a type of mortgage with unique features and benefits. DSCR mortgage loans in Washington are ideal for purchasing investment property. DSCR stands for Debt Service Coverage Ratio and is the annual net operating income of the property compared to its annual mortgage debt service. In short, it is a way to determine the borrower’s ability to repay the loan.
How Does a DSCR Loan Work?
If you’re looking for a loan to buy investment property in Washington State, but you don’t want to use your personal income to be able to qualify, a DSCR loan is the perfect option. It allows you to use the cash flow generated from the rental property you want to buy in order to get the loan.
However, the debt-to-income ratio is calculated differently across lending institutions. That’s why it pays to work with a knowledgeable mortgage company that understands the unique features of this investment property loan so that you know the requirements and the next steps to take with regard to your loan application.
DSCR Loan Features
DSCR loans are a type of mortgage with unique features and benefits. They include the following:
- No income or job history is required.
- No personal income calculations are used to qualify.
- No limit to the number of investment properties owned or financed.
- Low debt service coverage ratio qualifications of 1.0 (qualify on the cash flow of the property only).
- Close a loan in the U.S.-based corporation, LLC, and/or partnership.
- Loan amounts up to $5 mil.
- Unlimited cash out.
- Non-warrantable condo investments are allowed.
- Delayed financing options.
- AirBnB short-term rental income is allowed.
- As little as 20% down payment.
- Interest-only loan payment is available.
- Down to a 640 credit score.
- First-time real estate investors allowed.
- No reserves are required.
What to Know About DSCR Loans in Washington
If you’re considering a DSCR mortgage in Washington, the important thing to remember is that different lending institutions calculate them differently. Generally speaking, it divides PITIA (monthly principal, interest, taxes, insurance and association dues) by the gross monthly rent. Anything above 1.5 is great but 1.2 is also a good number. 1.0 simply means that the investor is getting the same amount of rent as their monthly payments on the property.
Understandably, most lenders want to know that your rental property will pay for itself. If you’re at that level, you still have other options, which is why it’s a good idea to contact LBC Mortgage for details. We work with a wide range of lenders that specialize in Washington DSCR loans and other types of alternative financing.
We Are Here To Assist You
A DSCR loan offers a number of benefits to real estate investors who are looking for a flexible alternative to help fund investment properties.
If you’re ready to learn more about DSCR loans and how they work or see if you fit the criteria, your next step to getting a DSCR mortgage loan in Washington is to call Washington State mortgage broker. Our experienced, friendly and helpful loan professionals will help you better understand the process as well as help you to get started on your loan application. Contact us today!