We’re the team specializing in helping investors finance rentals throughout New Jersey using a mortgage alternative called a Debt Service Coverage Ratio (DSCR) loan. The truth is that the fast and competitive New Jersey property market doesn’t leave room for the 30-day to 90-day closings standard with ordinary home mortgages. What’s more, traditional lenders look at a borrower’s personal income and W-2 forms to determine eligibility. That can be restrictive for anyone seeking entry to investing in the Garden State.
As experienced loan providers catering to investors, our programs can make purchasing or refinancing faster and easier. DSCR loans are ideal for investors because eligibility is based on a property’s income-generating potential instead of your personal income. When determining DSCR eligibility, the formula looks at gross rental income divided by expenses. Lenders call those expenses PITIA (Principal, Interest, Taxes, Insurance, and Association dues). A borrower who selects an interest-only (ITIA) DSCR program pays no principal on the loan for a specified period of time as a way to improve cash flow in the early stages.
DSCR programs are ideal for most investors because they:
- Base eligibility on a property’s cash flow instead of personal income.
- Require much less documentation compared to a conventional loan or mortgage. Faster availability of funds makes investor offers more competitive!
- Are designed specifically to finance the purchase of single-family to four-family properties.
- Can be used to fund the purchase of Airbnb, VRBO, and short-term rental properties.
It takes talking to a loan specialist to see if you qualify for a DSCR loan. However, borrowers generally need a minimum FICO score between 600 and 800 and down payment totaling 20% of a property’s purchase price. Our team offers a variety of flexible DSCR programs with different down payment requirements and qualification standards. In some cases, borrowers don’t even need rental income to qualify. Whether you’re a first-time investor who has never earned income from rentals before or you’re looking for a way to pick up a second, third, or fourth investment property, we’re here to help you find the DSCR program that’s right for you. Contact our office today!
