DSCR Loans in Atlanta
Real estate investors can add very profitable assets to their portfolios from the market in Atlanta, Georgia. This area has a growing economy and population, making it the ideal choice for both residential and commercial investment properties. Whether you are considering your first rental property or want to expand your current portfolio, financing new rental properties is one of the primary obstacles to creating new rental income.
A debt-service coverage ratio (DSCR) loan is a Georgia mortgage alternative designed specifically for real estate investors. You can use Georgia DSCR loans to purchase new investment properties and generate rental income.
Private lenders often look at various things before approval, including estimated rental income, current real estate income, the purchase price, appraised value, and more. They may not look at things like pay stubs or bank statements as long as you can afford closing costs and have a positive cash flow. This varies depending on the lender.
As an experienced Georgia DSCR lender, TrueWay Mortgage can provide the financing solution you need to buy an income-producing real estate property in Atlanta.
What is a DSCR Loan?
A debt-service coverage ratio loan is a unique mortgage for those with investment needs. Most other mortgages, such as Georgia conventional loans, require the lender to assess your personal income to determine borrower credentials.
However, a Georgia DSCR loan relies on a property’s rental income. If the property you want to buy can generate sufficient revenue to cover debt obligations, it will have a higher chance of being approved for a DSCR loan.
If you want to become a real estate investor in Atlanta, Georgia, TrueWay Mortgage can simplify the process and help you secure DSCR loans in Georgia.
Why Choose DSCR Loans in Atlanta?
Many Georgia real estate investors use DSCR loans to finance new properties. These loans are practical solutions due to their flexibility and focus on a property’s cash flow. Often, investors have numerous income streams or are self-employed.
This can represent a risk to a conventional lender. Since a debt-service coverage ratio loan is more concerned with rental income, investors have an easier path to expanding their portfolios.
Even with DSCR loans in Georgia, navigating the Atlanta market can be challenging. TrueWay Mortgage understands the local market and can guide you through the entire mortgage process when investing in Georgia rental properties.
Key Benefits of DSCR Loans for Atlanta Investors
If you plan to purchase rental properties in Atlanta, Georgia, DSCR loans are the ideal mortgage product. They offer numerous benefits, such as no personal income verification and flexibility in property types. TrueWay Mortgage can help you access these unique benefits as you navigate the real estate market in Atlanta. Let’s look at these advantages in greater detail.
Qualify Based on Property Income
Getting Georgia DSCR loans approved depends mainly on the income potential of the property being purchased. The more money a property generates, the more likely it is to have a higher debt-service coverage ratio.
This is ideal for rental property investors with multiple revenue streams. If all or most of your income comes from these properties, being approved for a conventional loan may be challenging. DSCR loans account for the money generated by a specific property or estimated income based on rental demand.
Some Georgia lenders will double-check income to ensure you can afford things like property taxes. They may ask to see tax returns or proof of other loans in Georgia. They’ll consider the property’s ability to generate income based on the Georgia market and construction projects you have planned.
It’s essential to disclose construction projects that will increase revenue, such as new flooring. TrueWay Mortgage can help you accurately evaluate a property’s cash flow when applying for Georgia DSCR loans.
Suitable for Multiple Property Types
Many mortgage products are designated for specific types of properties. For example, you can only buy certain home types with an FHA loan or USDA loan. A Georgia DSCR loan has a few limitations on the property you can buy.
You can use DSCR financing to purchase single-family homes, multifamily properties, or commercial properties in Atlanta, Georgia. Depending on the lender's programs, you could even use a DSCR mortgage to convert your current home into a rental property.
Investors can purchase single family homes in downtown Atlanta to use as a short term rental. However, it’s important to have a plan to ensure your shorter rental continues to generate income if you want to keep the property long term.
When you need flexibility with Georgia DSCR financing to purchase rental properties, TrueWay Mortgage can provide it. We take a common sense approach to determine your liability and help calculate your DSCR ratio.
Flexible Loan Terms
DSCR loans in Georgia are flexible by nature. When you apply for other mortgage products, you may be limited by the loan terms of those options. Many DSCR lenders will work with you to build a loan product that suits your needs.
This gives you flexibility in choosing the down payment, interest rates, adjustable versus fixed-rate loans, loan lengths, and more. The Georgia loan can be tailored to suit various investing needs with these customizable terms.
TrueWay Mortgage offers tailored loan solutions so borrowers can obtain mortgages that work for them. We can calculate DSCR amounts based on current demand for a long term rental, and see if the minimum DSCR amount will help you so you can pay it off quickly and keep growing your portfolio.
No Personal Income Verification Required
The typical lender will look at a borrower’s income to assess their risk. Borrowers with inconsistent paychecks, self-employment income, or rental property income may not have the financial consistency of a salaried worker.
Since the Georgia lender wants to verify that you can consistently make on-time payments, these types of income could hurt your chances of approval. Regardless of your financial situation, Georgia DSCR loans are given based on the property’s income and not your own. This ensures both new and experienced investors can obtain financing for new investment properties.
The team at TrueWay Mortgage offers a streamlined approach to obtaining a DSCR loan, so we can help you secure financing quickly to grow your real estate portfolio in Atlanta. We can help determine rental demand for a long term rental, calculate DSCR interest rates, and more to get you the financing you need.
DSCR Loan Eligibility in Atlanta
Many real estate investors are eligible for DSCR financing, but it is essential to understand the qualification standards for a typical DSCR mortgage. Loan eligibility will come down to factors like cash flow, credit score, and the down payment size.
TrueWay Mortgage can simplify this process to make your purchasing journey easier. Let’s look at the DSCR requirement for most Georgia DSCR mortgages.
Debt Service Coverage Ratio (DSCR) Expectations
The debt-service coverage ratio, also called a DSCR ratio, is a crucial metric during the underwriting process. This ratio is calculated by dividing a property’s net operating income by its total annual debts.
If the resulting number is at least 1.25, you have a better chance of loan approval. Private lenders have varying requirements for the DSCR, so research the lender you choose to determine their standards.
TrueWay Mortgage will help you accurately assess a property’s cash flow to determine the DSCR. We can also do this with a short term rental.
Down Payment Requirements
Investors typically have to put forth larger down payments to purchase new properties. Investment properties can be risky, so most lenders require a down payment of 15-20% or more for a DSCR mortgage.
The more expensive a property is, the more you may have to pay upfront on the loan. The down payment requirement will also be affected by the property’s income and your credit score.
TrueWay Mortgage offers investors competitive terms to make investing easier, including a favorable down payment.
Minimum Credit Score Requirements
While credit score requirements vary from lender to lender, most Georgia firms prefer to see scores of 620 or more. The borrower’s credit score reflects their ability to pay their debt on time. The higher your score, the better your chance of being approved and accessing more competitive interest rates.
TrueWay Mortgage will guide you through these requirements and can help you create a strategy to improve your score before applying for DSCR financing.
DSCR Loans for Residential Properties in Atlanta
The residential market in Atlanta offers investors many opportunities for substantial income. DSCR loans can purchase various residential properties, including single-family dwellings and multi-family units. Whatever kind of property you are interested in, TrueWay Mortgage has plenty of experience helping investors secure residential assets.
Single-Family Rental Properties
Single-family properties are incredibly popular in Atlanta. There are numerous suburban communities throughout the city, many attracting large populations of renters.
A DSCR loan can support your single-family property purchase and help you create a new income stream in a growing market. TrueWay Mortgage has worked with many investors who purchased these homes in the Atlanta area, so we can help you do the same.
Multi-Family Investment Properties
Multi-family properties cover a broad range of assets. Whether you want to buy a duplex, triplex, or larger multi-family complex, you can use a DSCR mortgage to secure the property. Many tenants are attracted to these properties because they can include some cost-sharing with other families to reduce their costs.
However, it will still result in substantial rental income for you, the property owner. TrueWay Mortgage can be flexible if you want to pursue more significant investments with your DSCR loan.
DSCR Loans for Commercial Properties in Atlanta
DSCR loans can also be used to buy commercial properties. With a growing economy, Atlanta is an excellent location for business owners. If you own office spaces or retail buildings in the area, you can secure business tenants to pay rent.
DSCR loans make purchasing this real estate more accessible since they are based on the property’s income potential. TrueWay Mortgage will create tailored solutions so you can easily buy commercial real estate in Atlanta.
The Atlanta Real Estate Market and DSCR Loans
Atlanta’s real estate market is a thriving segment of the economy. Even though it is one of the larger cities on the eastern seaboard, housing is still considered very affordable. This makes purchasing residential properties for investment purposes incredibly lucrative.
The local economy is also growing, with many new businesses setting up shop in the area and a growing population. These factors drive the investment property market, making the city an excellent option for new and experienced investors. When you need a lender with local knowledge, the team at TrueWay Mortgage has the necessary expertise.
DSCR Loans vs. Other Loan Options in Atlanta
Investors have several options to finance their purchases in Atlanta. Between conventional mortgages and hard money loans, it is essential to compare these products with DSCR loans to guide your decision-making. Let’s discuss the unique advantages of your loan options.
DSCR Loans vs. Conventional Loans
The lender will look at your income if you pursue a conventional loan. If you are self-employed or have a complex financial situation, it could be challenging to obtain financing. DSCR loans are based on property income, ensuring investors have an easier path to approval if they meet the other requirements. TrueWay Mortgage will use a collaborative approach to help you find the right solution.
DSCR Loans vs. Hard Money Loans
Hard money loans are ideal if you need a lot of money fast. However, they come with shorter loan terms and higher interest rates. If you plan and want to save money in the long run, a DSCR loan is a better option. TrueWay Mortgage has competitive offerings that appeal to more investors in Atlanta.
Why Choose TrueWay Mortgage for DSCR Loans in Atlanta
Choosing the right lender is key when purchasing investment properties. TrueWay Mortgage has been a trusted lending partner in Atlanta for years, offering buyers local expertise, tailored solutions, and a seamless loan process.
Contact Sam and Anisha Mauldin
TrueWay Mortgage
Start Your DSCR Loan Journey in Atlanta Today
TrueWay Mortgage is ready to help you accomplish your financial goals through DSCR financing. Our common sense approach ensures you understand everything about DSCR loans. Our team would love to schedule a consultation to discuss your needs. Use our quick quote tool to check current rates, or call us at 404-962-0032 to schedule a consultation.