How to calculate the DSCR point to benefit from a DSCR loan?
Calculating the DSCR for your Pennsylvania investment property is simple. First, determine the annual rental income the property is expected to generate. Then calculate the total annual debt service, which includes the mortgage payment (principal and interest). Divide the rental income by the debt service, and you will obtain the DSCR of the property.
For example, if you purchase a multifamily property in Allentown that generates $80,000 in rent per year and your mortgage payment is $65,000 per year, the DSCR would be 1.23. This means the property produces 23% more income than is needed to cover its debts, making you a good candidate for a DSCR loan.
CambridgeHomeLoan, a leading DSCR lender in Pennsylvania, generally requires a DSCR ratio of 1.0 or higher to qualify. This flexibility allows investors in cities like Reading or Erie to focus on cash flow rather than strict income requirements.
Credit Score Requirements for DSCR Loans in Pennsylvania?
Although the primary focus of DSCR loans is property income, credit score still plays a role in the approval process. Generally, most DSCR lenders in Pennsylvania, including CambridgeHomeLoan, require a credit score of at least 620 to qualify for a DSCR loan. However, higher credit scores can lead to better terms, such as lower interest rates and higher loan amounts.
If you’re investing in high-demand areas like Philadelphia or Pittsburgh, having a good credit score can help you get more favorable terms. But for many investors in emerging markets like Bethlehem or Scranton, DSCR loans offer the opportunity to obtain financing even with moderate credit, provided the property’s income is sufficient to cover the loan payments.
CambridgeHomeLoan offers easy application, minimal documentation and fast financing
CambridgeHomeLoan makes it easier than ever for Pennsylvania real estate investors to obtain DSCR loans. Our process is designed for investors, offering a simple application process, minimal documentation and fast funding.