We are a team dedicated to helping investors provide rent for the entire New Jersey using a mortgage alternative called a debt coverage ratio (DSCR) loan. The fact is that the fast-competing New Jersey real estate market in New Jersey will not provide room for a normal home mortgage for a 30-day to 90-day closure standard. More importantly, traditional lenders study borrowers’ personal income and W-2 forms to determine eligibility. This may be limiting for anyone looking to invest in Garden State.
As an experienced loan provider, our programs can make buying or refinancing faster and easier. DSCR loans are great for investors because eligibility is based on the income-generating potential of the property rather than your personal income. When determining DSCR eligibility, the formula focuses on dividing total rental income by expenditure. The lenders call these fees Pitia (principal, interest, taxes, insurance and association dues). Borrowers who choose an interest-only (ITIA) DSCR program do not pay the loan principal for a specified period of time as a way to improve cash flows at an early stage.
The DSCR program is ideal for most investors because they:
- Basic qualifications for property cash flow rather than personal income.
- There are much less documents required compared to regular loans or mortgages. Faster availability of funds makes investors more competitive!
- Designed for single-to-four-family home purchases.
- Can be used to fund purchases of Airbnb, VRBO and short-term rental properties.
It requires talking to a loan expert to see if you are eligible for a DSCR loan. However, borrowers usually need a minimum FICO score between 600 and 800 and a total down payment is 20% of the real estate price. Our team offers a wide range of flexible DSCR programs with different down payment requirements and eligibility criteria. In some cases, borrowers do not even need rental income to qualify. Whether you are an investor who has never earned income from rent for the first time or are looking for a way to choose a second, third or fourth investment property, we are here to help you find the right DSCR plan for you. Contact our office now!
