Texas DSCR Loans
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Real estate investors in Texas are flocking to DSCR loans, and it’s easy to understand why. DSCR or Debt Service Coverage Ratio loans are loans that use the income from your rental properties as the basis to approve you for a loan.
The best part about DSCR loans in Texas is that only the income of the subject property is taken into account. The lender will want to know about the income from other real estate properties, but they won’t be factored into the approval process.
What is a DSCR Loan?
In Texas, a DSCR loan allows real estate investors to use the cash flow from that rental property to purchase the property. It’s an excellent alternative to the traditional mortgage process. The only thing to keep in mind is that when working with a lender, rates can be calculated differently. For example, a calculation of 1.5 is excellent and demonstrates the profitability of the property in question. 1.2 is still a good number while 1.0 means that the property is earning the same amount as the debt behind it.
Lenders understandably want the property to make money, so even if the number is 1.0, there are still other options available to help you get a real estate investment loan.
Features of a DSCR Loan in Texas
DSCR loans are attractive to real estate investors because of the considerable number of benefits and the array of features they provide, including:
- 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.
If you’re considering investing in real estate property in Texas, a DSCR loan may be the right option for your needs.
We Will Assist You With Every Step of The Way
There are a lot of misconceptions about Specially Designed Loans in Texas. With proper information, you can make an informed decision to determine if this type of loan is right for you. If you are interested in finding out more, feel free to reach out to Texas DSCR Loans experts at LBC Mortgage.
Our experienced, friendly and helpful loan experts can help you find the right loan for your unique circumstances as well as take the time to answer any questions you may have about getting financing for your DSCR home loan in Texas. Contact us today to learn more!