Debt Service Coverage Ratio Loans In Silicon Valley

Frequently Asked Questions About DSCR Loans

How do you qualify for a DSCR loan in Silicon Valley?

Securing a DSCR loan in California isn’t too much different than getting approved in other states. However, one thing to keep in mind is that property values tend to be higher in California than elsewhere, which means that the average rent cost is also higher. You won’t need to provide us with the typical documentation required to qualify for a conventional loan (prior tax returns, pay stubs, W-2s, etc.) as long as you have an excellent DSCR ratio. 

Your DSCR ratio is calculated by taking your net operating income then dividing it by total debt service (this figure includes principal and interest payments on a loan). For example, if a business has a net operating income of $200,000 and a total debt service of $125,000, its DSCR would be approximately 1.6. 

Obviously, you want as high of a DSCR as possible and will almost certainly need above a 1 (and in many cases, 1.25) to indicate that you can bring in more money than you’re taking out in debt.

Benefits of DSCR loans: 

• They don’t require proof of income via tax returns or pay stubs
• Quicker closing times than typical conventional loans. You’re an investor, and time is money. 
• Unlimited number of properties (compared to VA loans, for example, which only permit one home loan at a time)
• Loan amounts as high as $5,000,000 if financing a larger investment property
• As little as 20% down payments required 
• Both long-term and short-term rental properties are eligible. This means if you plan to rent your property through services like AirBnBs, VRBO, and others, you can.
• And more

Are you a real estate investor in California and think that a DSCR loan might make the most sense for your next investment property? Get in touch with our team of DSCR loan experts to see how to qualify today. 

Find Debt Service Coverage Ratio Mortgage Lenders in California

 Our team here at Bachman Mortgage works with California-based real estate investors and professionals every day on their DSCR loan applications. We guide you through the entire process and answer your questions along the way. Reach out today if you want to get started on a DSCR loan application for your next investment property.

Non-QM Loans for Borrowers with Low DSCR

 If you’re a real estate investor with a low DSCR, a DSCR loan may not be the only option you can consider. You can look into alternative financing options such as asset-based loans, bank statement loans, interest-only loans, and recent credit event loans to see what you qualify for, even with a low DSCR.

Apply for Non-QM Investment Property Loan in Silicon Valley

Applying for a Non-QM investment property loan is straightforward. Get in touch with our team today to initiate the process, which is as simple as possible. You can reach out to have one of our team members contact you to schedule an appointment, or you can get your application started here.