A debt service coverage ratio (DSCR) loan is one that qualifies borrowers based on the property income (investment property’s cash flow) rather than the borrower’s income.
DSCR loans (also known as invest or cash flow loans) are frequently used by real estate investors to qualify for mortgages and buy investment properties. The debt service coverage ratio (DSCR) is the ratio of an investment’s net operating income to its total debt service. It is a way of determining whether the property generates enough income to support its current debt obligations.
This loan is best used to avoid having to submit income documents and having to be qualified with personal income.
For example,
