A DSCR (Debt Service Coverage Ratio) mortgage is a type of loan designed for real estate investors and businesses, focusing primarily on the income generated by the property being financed rather than the borrower’s personal income. The DSCR measures the property’s ability to cover its mortgage payments, including principal, interest, taxes, and insurance. A DSCR of 1 or higher indicates that the property generates enough income to meet its debt obligations, making it a key metric for lenders assessing the risk of investment property loans.

DSCR mortgages are ideal for investors seeking flexibility, as they often don’t require the extensive personal income documentation typical of conventional loans. Instead, lenders evaluate the property's projected rental or operating income to determine eligibility. These loans are commonly used for income-generating properties such as rental homes, multifamily units, or commercial spaces. While DSCR mortgages may come with slightly higher interest rates, they provide a streamlined financing solution for experienced and first-time investors looking to grow their portfolios. With the right property and lender, a DSCR mortgage can help you turn real estate income into long-term financial success.