Email: jherndon@nexamortgage.com
Call Me: 972-768-1381
Email:
jherndon@nexamortgage.com
Call Me:
972-768-1381
Debt Service Coverage Ratio:
No-Income Mortgage Loan
Compare Rates from 160+ National Wholesale Lenders
No SSN or Hard Credit Pull Required Typically for Pre-Qualification*
No Ratio - No minimum DSCR.
A Smart Way to Finance Your Real Estate Portfolio.
NEXA Mortgage SPECIALIZES IN DSCR NON-QM FOR INVESTMENT PROPERTIES
Benefits of DSCR Loans for real estate investors include:
- Potentially quicker closing times
- No income or job history verification required
- No limit on the number of properties
- Loan amounts up to $5,000,000
- Unlimited cash out
- As little as 15% down
- Interest loan options available
- Suited for new and seasoned real estate investors
- Both long-term and short-term rentals are eligible (Airbnb, VRBO, etc.)
- No reserves required on cash-out loans, 6 months required on all other loans unless the DSCR ration is less than 1.
Debt Service Coverage Ratio: No-Income Mortgage Loan
Qualify for a home loan without using your tax returns. As a real estate investor, you can avoid high rates and high points of private loans, lengthy approval processes, and strict lending criteria with a debt service coverage ratio loan, which is a type of no-income loan. Qualify for a loan based on your property’s cash flow, not your income.
Securing a debt service coverage ratio loan can help you expand your investment portfolio easier than ever before.
What Is a Debt Service Coverage Loan?
A DSCR loan is a type of non-QM loan for real estate investors. Lenders use a DSCR to help qualify real estate investors for a loan because it can easily determine the borrower’s ability to repay without verifying income.
Contact Us Today to See If You Qualify!
DSCR Formula Calculation
The debt service coverage ratio formula is the annual gross rental income divided by the debt obligations of the property.
- To find your Gross Rental Income we take your annual rental income based on your lease agreement and the appraiser’s comparable rent schedule (form 1007) and use the lesser of the two. In some cases, if you can prove a twelve month history of rental income you can qualify off of that rather than the appraiser’s market rent.
- Next, you’ll need to find your annual debt. Your annual debt for loan qualification purposes equals the total annual principal, interest, taxes, insurance and HOA (if applicable) payments. Annual Debt = Total Annual PITI payments
- Next, you’ll divide your annual gross rental income by your annual debt for your ratio. DSCR = Annual gross rental income/Annual Debt
EXAMPLE: A real estate investor might be looking at a property with a gross rental income of $50,000 and an annual debt of $40,000. When you divide $50,000 by $40,000, you get a DSCR of 1.25, which means that the property generates 25% more income than what is necessary to repay the loan. This also means that there is a positive cash flow in the lender’s eye.
What Is a Good DSCR Ratio?
Many lenders will require a 1.25 DSCR to qualify for a DSCR mortgage loan. However, NEXA Mortgage allows real estate investors to qualify for a loan with a DSCR as low as .75 so that they can qualify with the cash flow of your property. Please note that interest rates are better on DSCR ratios of 1 or above and that a DSCR ratio of less than 1 requires 12 months of reserves.
When considering what a good DSCR ratio is, lenders need to ensure that a borrower is able to pay back the loan.
The Dream Team with
NEXA Mortgage, LLC.
www.nexamortgage.com
NMLS # 1660690
AZMB # 0944059
Corporate Office:
3100 W Ray Road, Ste 201
Chandler, AZ 85226
An Equal Housing Lender All Rights Reserved. © 2020
Contact Us
John Herndon
Senior Loan Officer
NMLS
Located In: TX
Phone: 972-768-1381
jherndon@nexamortgage.com
PROUD SUPPORTER OF
This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Copyright © 2020 | The Dream Team with NEXA Mortgage LLC.
Licensed In: TX, NMLS # | NMLS ID 1660690 | AZMB #0944059
John Services all of TX
Contact Us
John Herndon
Senior Loan Officer
NMLS:
Located In: TX
972-768-1381
jherndon@nexamortgage.com
PROUD SUPPORTER OF
The Dream Team with
NEXA Mortgage, LLC.
www.nexamortgage.com
NMLS # 1660690
AZMB # 0944059
Corporate Office:
3100 W Ray Road, Ste 201
Chandler, AZ 85226
An Equal Housing Lender
All Rights Reserved. © 2020
This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Copyright © 2020 | The Dream Team with NEXA Mortgage LLC.
Licensed In: TX
NMLS # | NMLS ID 1660690 | AZMB #0944059
John Services all of TX