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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