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Updated over 1 year ago on . Most recent reply
DSCR Investment loans
Hi All, I'm Interested in finding out more about DSCR LOANS. PROS/CONS???
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#3 Private Lending & Conventional Mortgage Advice Contributor
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#3 Private Lending & Conventional Mortgage Advice Contributor
- Lender
- Austin, TX
Quote from @Robin Cornacchio:
Hi All, I'm Interested in finding out more about DSCR LOANS. PROS/CONS???
Generally (and there are lots of details and individual situations that differ) is that DSCR Loans vs. Conventional Loans are:
Cons - interest rates and closing fees ("points") are going to be a little bit higher (generally .75%-1% higher rate). Also prepayment penalties are typically included (DSCR loans with no prepayment are available, but would be more like 2-3% higher in rate in that case)
Pros: Main ones include:
-Do not need a W2 income, do not need tax returns
-No DTI calculation
-Can borrow in an LLC (with a partner, etc.)
-Much less loan size limits (can go bigger) or concentration limits (more than 10 loans)
-More flexible underwriting (good for short term rentals, quicker refinances, unique situations etc)