Interest-Only DSCR Loans
Some DSCR programs offer an interest-only period at the start of the loan, which lowers the early payment.
How it works
For an initial period, often several years, you pay only interest. After that, the loan converts to a fully amortizing payment over the remaining term, which raises the payment.
Trade-offs
- A lower payment can improve your ratio and early cash flow
- You don't build equity through principal paydown during the interest-only period
- The payment jump later has to be planned for
Ask about
Whether the program qualifies you on the interest-only payment or the fully amortizing one, since that changes your ratio.
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