DSCR Loans

Long-Term Rental loans are a specialized type of mortgage designed for real estate investors who want to acquire or refinance rental properties with a buy-and-hold strategy. These loans offer stable, long-term financing with competitive rates and terms, allowing you to focus on building your real estate portfolio and generating passive income over an extended period.

Traditional mortgages for investment properties often have stricter qualification requirements, focusing heavily on your personal income, credit score, and debt-to-income ratio. Long-Term Rental loans, on the other hand, primarily assess your qualification based on the property's income-generating potential, as measured by the Debt Service Coverage Ratio ). This makes them an attractive option for investors who may not have traditional income sources or prefer to leverage the property's potential rather than their personal finances.

Long-Term Rental loans offer several benefits for buy-and-hold investors:

Most lenders require a minimum of 1.25 or higher. This means the property's net operating income (NOI) should be at least 125% of the annual mortgage payments. A higher indicates a lower risk for the lender and may improve your chances of approval and better loan terms.

While Long-Term Rental loans offer more flexibility than conventional loans regarding credit scores, having a good credit history is still important. A higher credit score can demonstrate your creditworthiness and responsibility, potentially leading to more favorable loan terms. The minimum credit score requirement varies by lender, but it's generally 680 or higher. Some lenders may consider borrowers with lower credit scores if the property has a strong and other compensating factors.

Down payment requirements for Long-Term Rental loans typically range from 20% to 30% of the property's purchase price. A larger down payment can reduce the loan amount and lower the lender's risk, potentially leading to better interest rates and loan terms. Some lenders may offer programs with lower down payment requirements, but these may come with higher interest rates or other conditions.

Long-Term Rental loans can be used to finance a variety of rental properties, including:

Long-Term Rental loans typically have terms ranging from 15 to 30 years, similar to conventional mortgages. You can choose between fixed-rate and adjustable-rate mortgages, depending on your risk tolerance and investment strategy.

To maximize your returns with a Long-Term Rental loan, consider these strategies:

At The Investor Loan, we are committed to providing exceptional service and tailored solutions for real estate investors seeking long-term financing. Here's why you should choose us: