Read This Article to know everything you need to about DSCR loan Florida 2022 for real estate investors coming up. Hey guys today we’re talking about DSCR loan Florida 2022 for real estate investors and how to get approved what’s involved let’s just jump right into it
what’s a DSCR loan Florida 2022?
A DSCR loan Florida program is a way for real estate investors to get a mortgage based on property cash flow, not personal income so this means tax returns pay stubs nothing like that is going to be required DSCR stands for debt service coverage ratio that service coverage ratio is the ratio of operating income available to debt servicing for interest principal and any other payments liable on the property like huge dues and stuff like that in basic terms you take your rental income divided by your mortgage including taxes and insurance and that equals the debt service coverage ratio
Example 1:
if your monthly rental income is 2300
and your monthly mortgage payment with taxes and insurance is 1950
you take 2 300 divided by 1950 which equals 1.18 so in this case your DSCR is 1.18.
typically, lenders want to see a DSCR of at least one but there are exceptions and I’ll cover that as well
Example 2:
What’s the advantage of getting a DSCR loan Florida program
you know when it comes to getting a mortgage approval simplicity is everything in today’s market for a real estate investor there’s nothing simpler than a DSCR loan Florida.
so with a DSCR loan Florida program, you do not have to provide tax returns or pay stubs for verification of employment not having to provide that type of documentation is a major way to eliminate any unnecessary conditions and can save substantial time
so keep in mind the income portion of the mortgage approval is based on the property cash flow but the assets the credit and everything else for the borrower will still need to be evaluated like a traditional mortgage.
How does the DSCR loan Florida 2022 program work
Just like any mortgage, you have to submit your application but with the DSCR loan Florida you’ll exclude any employment and income history on the application so the lender will pull your credit review your assets and when it’s time to order the appraisal you’ll get a 1007 rent schedule the lender will order it for you basically that’s added to the order the 1007 rent schedule is a form the appraiser fills out to evaluate and report fair market rent the fair market rent that is calculated is the figure that’s used to calculate your debt service coverage ratio if the existing lease exceeds market rents the lease may be used to calculate the DSCR as long as the lease will continue for six months after the new mortgage note date and the most recent two months’ rent payments were received on time there’s a couple
Different types of DSCR loan Florida 2022
let’s start with the first one the DSCR loan Florida program
- Standard
The standard product would apply if you’re purchasing an investment property or refinancing a rental that can show the fair market rent or current rent can cover the mortgage payment including taxes and insurance like having a DSCR of one or above for a purchase you’re looking at minimum down payment is 20 percent for refinance maximum loan to value ratio is 80 on a cash-out refinance maximum loan to value ratio is 75 and you must have owned the property for at least 12 months you can go as low as 600 on a credit score you can’t have any bankruptcies or foreclosures in the last four years minimum loan amount on these is a hundred thousand
which is the DSCR loan Florida No ratio
so if your property can’t show the market rent coverage the mortgage with taxes and insurance a no ratio program is likely your best solution where you can have 0 to 0.99 a debt service coverage ratio for this product on a purchase you’re looking at a minimum of 25 down on a refinance uh maximum loan to value is going to be 75 for cash-out refinance on a no ratio product you’re looking at a max of 70 loan to value and credit score as low as 620 on this so you can’t have any bankruptcies or foreclosures in the last four years on this product and again for this minimum loan amount is 150000.
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what can you expect when getting a DSCR loan Florida
so with this alternative loan type, you can still expect the loan to be fully underwritten with the exception of personal income that means your assets and credit will be fully verified and the property needs to meet lender requirements the best thing that you can do to set yourself up for success
for this type of loan and every loan for that matter is to provide exactly what the lender is asking for don’t send in partial bank statements don’t send an id that’s not legible get everything in as clearly and as organized as you possibly can i promise you everybody that is organized when they send their stuff in they always close quicker 100 of the time so
In summary
the advantage of not having to provide tax returns or any personal income documents is a major benefit for investors who are looking to start or grow the real estate portfolio this is a great option if the property pays for itself also as mentioned even if it doesn’t pay for itself the no ratio product is a great one to look into as well
the DSCR loan Florida is available for
real estate investors on a purchase a cash-out
refinance rate and term refinance are available on single-family homes condos town homes in two to four units
you can go as low as 600 credit score depending on the loan-to-value ratio and which product you’re going with
so first-time investors are considered on a case case-by-case basis whatever questions you have anything i didn’t cover that you would want more clarity on let me know what questions you have in the comments and as always