DSCR Loan Mississippi

What You Need To Know About Mississippi DSCR Loans

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

First off, the average property price in Mississippi is only $172,654. This is $176,000 less than than the average home value in the US ($348,853).

In addition, Data from RentData.org suggests that Mississippi has some of the lowest rental rates in the US, ranking 50th out of all the states and territories in America.

These details indicate that the barrier to entry in Mississippi is very low. It is well suited to first time rental property investors hoping to break into an affordable real estate market in the US. However, there is also a catch. Low property prices and low rental rates limit the profit potential when investing in the Magnolia State.

DSCR Loan Mississippi 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 Mississippi DSCR Loan, it’s important to keep the following DSCR Loan Requirements in mind.

Interest Rate: A Mississippi DSCR loan carries a fixed interest rate of 7.5%, impacting the overarching cost of purchasing a rental property in Mississippi.

Minimum DSCR: There is no minimum debt service coverage ratio (DSCR) required, if you opt for a New Silver DSCR Loan. This provides greater flexibility in loan structuring.

Credit Score: To qualify for a DSCR Loan requires a minimum FICO score of 660, which is a reasonably good credit score.

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

Loan-to-Value (LTV): The loan can cover up to 80% of either the property’s value. The remaining 20% is covered by the borrower.

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

Origination Fee: An origination fee of 2-3% of the loan amount applies to cover administrative costs.

To summarize, a DSCR loan in Mississippi offers a fixed interest rate of 7.5%, without a minimum DSCR requirement. To qualify, borrowers need a minimum FICO score of 660and 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 Mississippi DSCR loan aligns with their investment needs.

 

DSCR Loan Mississippi Down Payment

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

 

DSCR Loan Mississippi Interest Rates

The interest rates for DSCR Loans in Mississippi 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 Mississippi. 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 loan origination team will consider before offering the final terms of a DSCR loan.

 

How To Use DSCR Loans To Buy Rental Properties In Mississippi

One of the best aspects of a 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 Mississippi, 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.