Our client and his brother recently inherited their parents’ home after both parents passed away. Our client wanted to buy out his brother’s interest in the property and retain the property as a rental investment property.
However, our client could not qualify for a traditional mortgage. As a commission-based employee, he did not show consistent income through his tax returns. Therefore, his debt-to-income ratio (DTI) was too high.
We found the solution for him – the DSCR program. The debt service coverage ratio (DSCR) measures the property’s net cash flow, after accounting for the property taxes, the cost of insurance, and the expected mortgage payments.
Because the lender is focused on the property, rather than the borrower, it’s possible to qualify for a DSCR loan without using the borrower’s tax returns or current personal or business income.
We therefore closed our client’s cash-out refinance under the DSCR program. He used some of the cash-out proceeds to buy his brother’s interest in the property. He used the remaining proceeds to do some light renovations to the property to maximize his rental income.
Even if you have DTI issues, or even if you have zero personal income, you can still qualify for an investment property loan. Learn more about our creative loan programs for investment properties here.
Contact us today to get started.
