Areas We Serve
At Griffin Funding,we can provide DSCR business loans throughout all of Pennsylvania. Some of the areas in Pennsylvania in which a DSCR lender can help you include:
- Reading City
- Upper Darby
These are just a few of the cities in which we can provide DSCR loans. To learn more about these loans, as well as any of the other Non-QM or traditional loans we offer, reach out to our team.
What Is a DSCR Loan?
If you are interested in a DSCR loan in Pennsylvania, understand that this is a specific type of loan usually utilized by real estate investors. A DSCR mortgage is a type of Non-QM loan where borrowers can qualify for financing based on their debt service coverage ratio (DSCR), which measures a borrower’s cash flow versus their debts. Ultimately, this allows real estate investors to secure a loan based on projected cash flow.
If you apply for a traditional mortgage, there is typically a drawn-out process that you have to go through to verify your income. If you apply for a DSCR mortgage instead, you do not have to worry about us verifying your income. We can shorten the process, give you the money you need, and allow you to get to the closing table.
How Does a DSCR Loan Work in Pennsylvania?
With a real estate investment, you can write off a lot of the expenses related to your properties. Even though this is a significant benefit, some real estate Investors have a difficult time qualifying for a traditional loan. If you decide to go with a debt service coverage ratio loan instead, you may be able to qualify for a loan more easily.
Tax deductions can artificially reduce the income on your tax return, which might make it harder for you to qualify for a loan. Because you do not need to prove your income to us—and instead use your DSCR to qualify—you may have an easier time qualifying for this type of loan.
How Is DSCR Calculated?
The debt service coverage ratio is a straightforward calculation. Simply take your annual gross rental income and divide it by your debt obligations, and this provides you with your debt service coverage ratio.
When we calculate DSCR, we will examine your annual rental income on the lease agreement. Then, we will compare this to the rent schedule from the appraiser. We will use the lower of the two values. If you can prove to us that you have a 12-month rental income history that is higher than these numbers, we can use that instead. If you are investing in a short-term rental we can use AirDNA comparables as STR income.
To calculate your annual debt, we will take a look at your annual principal, interest, home insurance, taxes, and HOA fees. That will give us the total amount of debt that you have.
Finally, with all of this information, we can calculate the DSCR. This will give us a better idea of how much money we can provide you with for the loan.
Who Qualifies for a DSCR Loan?
There are plenty of people who can qualify for this type of loan, but it is typically an option reserved for real estate investors. If you are heavily involved in the real estate business, your annual income might be lower after claiming all of your deductions. This can make it hard for you to qualify for a traditional mortgage, but we can still help you using a DSCR loan.
In order to qualify for a Pennsylvania DSCR loan at Griffin Funding, your DSCR must be at least 0.75 or higher. A higher DSCR makes it easier to secure a lower interest rate and more beneficial loan terms. You also need to make sure that you qualify with a minimum credit score and have a minimum 20% down payment. If you are able to meet these requirements, then we may be able to help you qualify for a DSCR loan.
Other Non-QM Loans From Griffin Funding
In addition to DSCR loans in Pennsylvania, we offer a range of other Non-QM loans. If you are looking for non-traditional financing options, some of the loans we offer at Griffin Funding include:
- Asset-based loans: You might be interested in qualifying for a home loan using only your assets instead of your income. This could help you save time and money.
- Bank statement loans: We have loans that you can apply for using your bank statements, which can help you avoid traditional income verification processes.
- Jumbo loans: If you are interested in applying for a non-conforming loan with a much higher limit, reach out to us to learn more about our jumbo loans.
- Interest-only loans: We provide loans that allow you to pay only the interest and none of the principal for a predetermined period of time. It would be our pleasure to talk with you about this choice.
As you consider how you will finance a real estate purchase, you need to think carefully about which option is right for your needs. At Griffin Funding, our team can help you determine which loans you qualify for and which are best-suited for your particular needs.
Work With a Qualified DSCR Lender in Pennsylvania
In the end, a DSCR loan in Pennsylvania could be the best option for some people. We are Griffin Funding, and we are proud to offer a wide variety of loans that could help you qualify for a mortgage. We will walk you through the process, making sure you select the best option for your needs.
If you would like to apply for a loan through our team, reach out to us today! We would be honored to help you find the best possible mortgage for your individual situation.