Real Estate Market And DSCR Loans: What You Need to Know

Massachusetts investors take advantage of the many benefits associated with DSCR mortgage loans when purchasing investment properties. With superior financial flexibility and the best loan terms, the DSCR program allows borrowers to make strategic decisions in their pursuit of real estate success. Massachusetts is one of the best states to explore DSCR mortgage loan options. By ensuring that rents are higher than the mortgaged obligations, Massachusetts DSCR loans provide investors with a powerful tool to generate higher levels of profitability over time. And with LBC Mortgage, buyers turn a lump-sum purchase into an ongoing source of income.

What does DSCR mean?

Determining DSCR is critical in evaluating a company’s debts and its ability to remain financially healthy. DSCR is especially important when applying for a mortgage loan, as lenders use this metric to determine whether a borrower can withstand taking on additional debt and make repayments regularly. In Massachusetts, lenders will set the DSCR expectations before approving any new loan based on each case’s unique financial situation.

DSCR ratio is calculated by dividing net operating income (NOI) by total debt service (TDS).

  • NOI represents a property’s income after operating expenses, prior to taxes, interest, depreciation, and amortization.
  • TDS consists of all the periodic loan payments, such as principal, interest, sinking funds, and lease buyouts.

The borrowers need to have a debt service coverage ratio of at least 1.25 and ideally higher. It is similar to an individual’s credit score in that it shows lenders whether the business has good financial health and the ability to pay back its loans.

Multiple properties financing with a DSCR mortgage loan

Borrowers looking to invest in commercial real estate can rely on DSCR loans to achieve their goals. You can finance the purchase of multiple properties with the DSCR program:

It is a flexible option that can help investors from various industries make purchase decisions with confidence.

How to apply for a DSCR mortgage loan in Massachusetts

Minimum paperwork
The application process is straightforward and hassle-free. When applying for a DSCR loan, it is important to know that the loan documentation is standardized. In other words, the paperwork will remain the same for all applicants, regardless of which lender you choose to work with.

Additionally, the financial documents you fill out will only ask for information relevant to your business or rental property. No personal income history is required.

Fast closing
The application and closing process for DSCR loans is usually much faster compared to other loan products, making it the perfect choice for investors who need funds as soon as possible. Fast access to capital often makes a huge difference in business success – and with DSCR loans, speed is not a worry.

DSCR loan requirements

  • No job history is required.
  • No personal income calculations are required to qualify.
  • 640+ credit score.
  • Low 20% down payment.
  • The unlimited number of investment properties owned or financed.
  • Close a loan in a U.S.-based corporation, LLC, or partnership.
  • Loan amounts up to $5 mil.
  • Only the cash flow of the property is required.
  • Unlimited cash-out options.
  • Delayed financing options.
  • Short-term rental income is allowed.
  • Interest-only loan payment is available.
  • First-time real estate investors are allowed.

Work with a reliable mortgage company in Massachusetts

DSCR loans offer an excellent opportunity to get your foot in the door for commercial real estate investments. LBC Mortgage is an experienced mortgage firm. We are here to provide friendly and helpful advice to better understand the process and assist you with initializing your application.

For over two decades, we have been helping investors secure the most competitive DSRC mortgage rates. Our experienced loan officers will expertly assess your financial situation and goals to ensure you get the best deal. We take great pride in our commitment to excellence, so you can be confident that you are getting first-rate assistance from LBC Mortgage whenever you need it. Put your trust in us, and you won’t be disappointed!

So if you’re ready to get started on your path toward securing a DSCR mortgage in Massachusetts, wait no longer – call now for your free consultation!