Good bank that DOES DSCR

[Damein White]

I'm ready to do the DSCR FOR MY REFINANCE PLEASE SEND GOOD REFERRALS IN CLEVELAND IF YOU HAVE ANY

[Devin Peterson]

Quote from @Damein White:

I'm ready to do the DSCR FOR MY REFINANCE PLEASE SEND GOOD REFERRALS IN CLEVELAND IF YOU HAVE ANY

Hi Damein,

I recommend taking a look at the find a lender tab, or chatting with an experienced investment focused broker who can help you compare the terms across all different lenders and their platforms. Let me know if you have any questions -
good luck!

[Robin Simon]

Quote from @Damein White:

I'm ready to do the DSCR FOR MY REFINANCE PLEASE SEND GOOD REFERRALS IN CLEVELAND IF YOU HAVE ANY

DSCR Loans are generally not from traditional banks - they are typically offered by private lenders

https://www.biggerpockets.com/blog/what-documents-do-you-nee...

[Melvin List]

@Damein White I would look at a broker for any DSCR loans. Bank will be limited on the products they offer. A broker can shop multiple lenders for you.

[River Sava]

Hi Damein,

As others mentioned, traditional banks don't typically offer DSCR loans. These types of loans are often found through alternative lenders that specialize in real estate investment financing. Understanding all the intricacies can be challenging (and confusing). I'll send you a DM to connect and discuss further.

[Stacy Raskin]

There are lenders that specialize in DSCR loans. A lender that specializes in DSCR loans are more likely to have better terms such as better rates and a DSCR 1 ratio. For easy math, for example, that means you need at least $1,000 in rent to cover $1,000 in expenses. A DSCR 1.2 ratio means you need $1,200 of rent to cover $1,000 expenses. The expenses used in 1-4 unit loans by many DSCR lenders are the mortgage, property taxes and insurance and HOA (if applicable).

More info on DSCR loans:

DSCR loans won't use your income to underwrite the loan.

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760-780+ generally gets best pricing for investment property loans with most lenders. From there every 20 point increment affect pricing differently. So for example, a 761 credit score will be in the 760-779 credit category, then going down to 740-759 and so on.

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable). If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

Happy to discuss further. 

[Erik Estrada]

Quote from @Damein White:

I'm ready to do the DSCR FOR MY REFINANCE PLEASE SEND GOOD REFERRALS IN CLEVELAND IF YOU HAVE ANY

 Hi Damein, 

Is this a cash out or rate and term refinance? 

[Scott Wolf]

Quote from @Damein White:

I'm ready to do the DSCR FOR MY REFINANCE PLEASE SEND GOOD REFERRALS IN CLEVELAND IF YOU HAVE ANY

 Our rates at LendingOne are bottoming out.  Feel free to check us out, and drop me a line.

[Conor Deasy]

@Damein White

As brokers we could you assist you with this - we've done a few re-fi's in Cleveland over the past year. 

[Alex Bekeza]

Hey @Damein White I encourage you to check out our references from other Bigger Pockets Members - https://www.biggerpockets.com/business/page/1744#

I hope BP makes a way to sort lenders by reviews soon!

[Brittany Minocchi]

Hey @Damein White - 

I'm down in the Akron/Canton area, I don't know of any banks in OH that do DSCR loans. For that product your best bet is working with a broker. If you have any questions, feel free to connect!

[Anderson S.]

Not a bank but as a lender, we'd love to be a part of your real estate journey.

[Jill F.]

I'm in the Akron area, I have used Commercial financing from both Civista and Wayne Savings (now Main Street Bank) for DSCR financing. I have also talked to Dollar Bank Commercial lenders about a loan that uses DSCR criteria but ended up going with another lender.

[Regina Blake]

Hi, yes great information check out some lenders that are online too and speak to them about your real estate needs and goals. There are a lot of them out there but, as you are doing your research and speaking to the professionals with definitely point you in the right direction and reach out if you have any questions. Good Luck!