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DSCR Loan Pros and Cons

DSCR loans solve real problems for investors.

Pros

  • No personal income documentation
  • Can close in an LLC
  • No cap on the number of financed properties with most programs
  • Qualifying is based on the property, which scales with your portfolio

Cons

  • Larger down payments
  • Prepayment penalties are common, see prepayment penalties
  • Investment properties only

Bottom line

For investors whose tax returns don't reflect their real income, or who are growing past conventional limits, the trade-off often makes sense.

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