DSCR Loan Connecticut

What You Need To Know About Connecticut DSCR Loans

There are a couple of things you should know about DSCR Loans in Connecticut.

First off, the average property price in Connecticut is $374,599. This about $46,000 more than the average home value in the US ($348,853).

Perhaps more importantly, the rental rates in CT are quite high. According to RentData.org, Connecticut has the 7^th highest rental rates in the US. Reasonably affordable house prices combined with relatively high rental rates is a very attractive combination for long term property investors.

 

DSCR Loan Connecticut Requirements

• Interest Rate: from 7.5%
• Minimum DSCR: None
• Minimum FICO: 660
• Down Payment Required: 20%
• Loan To Value: up to 80%
• Loan To Purchase Price: up to 80%
• Minimum Loan Amount:$150,000
• Maximum Loan Amount: $3,000,000
• Origination Fee: 2-3%

If you are looking for a Connecticut DSCR Loan, it’s important to keep the following factors in mind.

Interest Rate: The Connecticut DSCR loan carries a fixed interest rate of 7.5%, impacting the overall borrowing cost and influencing the investment’s financial feasibility.

Minimum DSCR: Notably, there is no minimum debt service coverage ratio (DSCR) mandated, providing greater flexibility in loan structuring.

Credit Score: Eligibility for the loan requires a minimum FICO score of 660, indicating a relatively good credit history for the borrower.

Down Payment: A 20% down payment based on the property’s purchase price is necessary, reducing the lender’s risk and ensuring the borrower’s significant stake in the investment.

Loan-to-Value (LTV): The loan can cover up to 80% of either the property’s value or purchase price, necessitating a minimum 20% down payment from the borrower.

Minimum & Maximum Loan Amounts: The loan is available for amounts between $150,000 and $3,000,000.

Origination Fee: A lender’s origination fee of 2% to 3% of the loan amount applies to cover administrative costs.

Connecticut DSCR loans offer a fixed interest rate of 7.5%, without a minimum DSCR requirement. To qualify, borrowers need a minimum FICO score of 660 and must provide a 20% down payment. The loan-to-value and loan-to-purchase price ratios permit up to 80% financing, and the loan amount can range between $150,000 and $3,000,000 Additionally, an origination fee of 2-3% is applicable. Careful consideration of these factors will enable potential borrowers to evaluate whether a Connecticut DSCR loan aligns with their investment needs.

 

DSCR Loan Connecticut Down Payment

Real estate investors are required to make a 20% down payment in order to secure a DSCR Loan in Connecticut. Some DSCR lenders may allow lower down payments if you are a repeat borrower, have an excellent financial track record and a good credit score. However, for most borrowers, a 20% deposit is required. This ensures that the lender and the borrower both have equity in the investment.

 

DSCR Loan Connecticut Interest Rates

The interest rates for DSCR Loans in Connecticut currently start at 7.5%. However, it is important to note that several factors contribute to the final interest rate offered to rental property investors in CT. These factors include:

• FICO Score & Credit History
• The Investment Property
• Real Estate Investing Experience
• The Current Repo Rate
• The Local Property Market Where The Property Is Situated

There are also other considerations that the lending team will consider before offering the final terms of the DSCR loan.

 

How To Use DSCR Loans To Buy Rental Properties In Connecticut

One of the best aspects of a Connecticut DSCR Loan is that the rental income of the investment property is factored into the loan terms. So, instead of being responsible for making the full monthly loan repayment, the rental income that the property can produce helps determine if the loan can be granted.

To use DSCR Loans to Buy Rental Properties In Connecticut, these are the main steps to follow:

• Step 1: Find a property that can produce good rental rates
• Step 2: Ensure you have the finances to cover the down payment
• Step 3: Apply for a DSCR Loan with top-rated DSCR Lender

Obviously, there are additional complexities involved in each of these key steps, but from a high-level perspective, these steps outline what you need to do.