DSCR stands for debt service coverage ratio. The lender compares the property’s expected rent with its full monthly payment, including taxes and insurance. If the rent covers the payment well, the loan can work without tax returns or pay stubs.
Why it matters
It lets investors, especially self employed ones, grow a rental portfolio without their personal income becoming the limit. The trade off is that these loans usually cost more than a loan on your own home and expect a larger down payment.
Where you meet it
When you finance a rental property, often in the name of an LLC. Our guide DSCR loans explained covers how they work.
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