Get an Investor Mortgage With a DSCR loan

DSCR loans are an unique type of mortgages geared towards investors who are looking to increase the size of their rental portfolio. Very little paperwork and no personal income is ever required to qualify. 

What is Debt Service Coverage Ratio (DSCR Loan)? Understand the Metrics That Drive Your Investment Potential

The world of mortgages is often filled with complex terms and acronyms, and one such term that you may have come across is Debt Service Coverage Ratio, or DSCR Loan. Despite sounding intricate, the concept of DSCR is straightforward once you break it down.

At its core, the Debt Service Coverage Ratio (DSCR) is a measure of a firm’s or an individual’s ability to manage their debt. Specifically, it’s a financial metric used to assess the cash flow available to pay current debt obligations. In other words, it reveals the cash left over after all operational expenses have been covered.

Think of it as a financial health check. It helps lenders, investors, and even you, understand how comfortably you can cover your debt with your current income. 

To make it even easier to understand, think of the debt as the “monthly property payment”. This includes the loan payment, taxes, insurance and HOA dues and the income as the “rents” that you would collect.

To calculate DSCR, you divide your Net Operating Income (the income you generate from your business operations before deducting interest and income taxes) by your Total Debt Service (the total amount of your current debt obligations, including both principal and interest). 

Here’s the simple formula: 

**DSCR = Net Operating Income / Total Debt Service**

For example, if the property has a Net Operating Income of $50,000 and a Total Debt Service of $40,000, your DSCR would be 1.25. 

A DSCR of less than 1 indicates that there’s insufficient cash flow to cover debt obligations, which raises a red flag for lenders. Conversely, a DSCR of greater than 1 shows that there is enough income to comfortably pay off debts – a sign of financial health.

Now that you understand what DSCR is, you may be wondering how it’s applied in the financial world, specifically in the realm of DSCR loans. Read on to discover how this financial metric can be leveraged to unlock significant investment potential.

Why Opt for DSCR Loans? The Benefits and Real-World Applications You Should Know

When it comes to choosing the right loan product, understanding the options and their unique advantages is crucial.

One such option, which is often overlooked in favor of more traditional loan products, is a Debt Service Coverage Ratio (DSCR) Loan. So, why should you consider DSCR Loans? Let’s dive into the benefits and potential applications that make these loans an attractive choice for investors.

Benefit 1: Flexibility in Income Documentation

Traditional loans often require extensive personal income documentation. DSCR loans, on the other hand, offer flexibility in this area.

Instead of focusing solely on personal income, lenders look at the income produced by the property being financed. This opens doors for borrowers who have strong investment properties but may not have traditionally high personal income.

Benefit 2: Ideal for Investment Properties

DSCR loans are tailor-made for investment properties, particularly rental properties. These loans take into account the rental income the property is generating, or even the potential rental income based on fair market rents. This makes DSCR loans a perfect fit for real estate investors looking to leverage property income to expand their portfolios.

Benefit 3: Streamlined Application Process

Unlike traditional loans, DSCR loans usually offer a more streamlined application process. Since the focus is on the property’s income potential rather than the borrower’s personal financial situation, the underwriting process can be simpler and quicker.

Real-World Applications of DSCR Loans

Now that we understand the benefits, let’s consider some real-world applications of DSCR loans.

Investment Property Purchase: One of the most common uses of DSCR loans is the purchase of investment properties. Investors can utilize the rental income potential of the property to qualify for the loan, rather than relying solely on personal income.

Portfolio Expansion: For investors seeking to grow their property portfolio, DSCR loans can provide the necessary leverage. By focusing on the income of each property, investors can acquire additional properties without being restricted by personal income limitations.

Refinancing: DSCR loans are not just for new purchases. They can also be a valuable tool for refinancing existing properties. If a property’s income has increased over time, a DSCR loan may allow for a higher loan amount or better terms than a traditional loan.

In conclusion, DSCR loans offer distinct advantages over traditional loan products, particularly for real estate investors. By focusing on property income, these loans offer greater flexibility, streamlined processes, and a powerful tool for portfolio expansion. Explore the possibility of a DSCR loan today and unlock your investment potential.

Ready to amplify your investment power? Embrace the flexibility of DSCR loans. Apply now and unlock your real estate potential.

Our Clients' Success: See How DSCR Loans Empower Real Estate Investments

Here are a few examples from our clients, demonstrating how DSCR loans have empowered their real estate investments.

Case Study 1: Refinancing existing debt on an investment property

Client Background: Jackeline, a part-time real estate agent, and investor with a full-time job in tech, owned a primary and a rental property but struggled to qualify for more traditional financing due to her high debt-to-income ratio caused by student loan debt.

Challenge: Despite the rental properties generating steady income, most lenders focused on Jackeline’s personal income and existing mortgage debt, making it tough for her to access the equity on her investment property.

Solution: We introduced Jackeline to DSCR loans. By assessing the income from the rental properties instead of her personal income, we provided a loan that enabled her to refinance the property and access over $70,000 in equity to consolidate debt and purchase another property.

Result: Jackeline was able to pay off over $40,000 in unsecured debt which allowed her credit scores to increase while at the same time, padded her savings waiting for a new rental property.

Case Study 2: Out of state investor wanted to take advantage of the Georgia market

Client Background: Sayeed, a retiree living in New Mexico had recently sold a couple of properties which provided him with a substantial nest egg to continue investing. The Georgia market appealed to him as Atlanta is one of the fastest growing cities in the country and he had been eyeing starting to make investments in the area. However, he struggled to qualify for conventional financing due to his high debt-to-income ratio caused by the low retirement income he had.

Solution: We introduced Sayeed to the DSCR loan in order to make the new investment purchase. Coupled with his high credit scores and large down payment, he was able to finance over $300,000 on his new mortgage without having to provide proof of personal income.

Result: Since his purchase, Sayeed’s property has appreciated by over 10% from the initial appraised value and because of the area, he commands a premium on his rental income from the property.

Here are a few things you should know about DSCR loans

Navigating your options doesn’t have to feel overwhelming.

As a boutique mortgage brokerage, we work with multiple lenders, shop their rates, and help you find the right one. So you can focus on more important things.

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Applying for an DSCR loan in Metro-Atlanta

With the amount of misinformation spread out there and the volatility in interest rates in the market, you definitely want to put your biggest asset (and liability) in the hands of a professional. 

With over a decade of experience in financing investment properties in Atlanta and access to some of the lowest rates in the market, Andes Mortgage LLC is a boutique brokerage with the ability to offer a variety of investor loan products that many other lenders don’t. 

We don’t put you on a switchboard and we promise that you are not going to speak to a customer service rep in a boiler room looking to make you fill out an application and run your credit. We give you personal, tailored information that is unique to you and your financial situation. Give us a call at 770-740-4050 or simply click the button below to get in contact with us.

What Our Clients Say About Us


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Rebekah Apostol
Rebekah Apostol
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We loved working with Marcos and his team! They are all very friendly, on top of details, and a pleasure to work with. We are first time home buyers, and Marcos took his time to educate us on the steps we needed to take to improve our credit and financial situation in order to be well prepared to buy a home. Once we were ready, he educated us in the home buying process, and made everything very easy. His rates were also much lower than others we saw. We would recommend his services to anyone looking for a lender! Our very experienced realtor was even very impressed with how smooth and quick the process was with Andes Mortgage!
Zyska Walters
Zyska Walters
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Let’s just say Andes Mortgage as our broker was the best decision we made. We worked with Marcos who explained the process very well and was available when we had questions. Our realtor was the one to refer him to us. They definitely work fast and we closed within two and a half week of going under contract. His entire team was great and communicated well. We will definitely work with them in the future.
Nicole Falco
Nicole Falco
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Being first time home buyers and going through the process first time, it was quite overwhelming beginning the process…. Until our paths crossed with Marcos! He was kind, professional, honest, friendly, welcoming, and made the entire process seamless and smooth for us! Not to mention, he earned our trust right off the bat!! It’s refreshing to be in the hands of someone who actually has our best interest at heart and puts his clients first. We’re forever grateful for Marcos and will continue to recommend him to any and ALL of our friends and family who are looking to apply for home mortgages!!!!
Adrian Garcia
Adrian Garcia
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Working with Marcos has been such a good experience. He helped me a lot during my initial purchase and also now during my refinancing process. He always keep you informed either by phone, mail or text. If you are looking to buy a house or refinance, he is definitely the option!