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  • Writer's pictureBeata Bukowski

How to Buy Investment Properties Without Employment Income?

Are you looking to purchase an investment property but don’t have employment income? Don’t worry! There are many ways to buy investment properties, rental properties, and a debt service coverage ratio loan is one of them. This type of loan does not require employment or income information for the borrower to be verified. Let’s break down how this loan works so that you can make the most informed decisions when it comes to buying your dream property.

How Does a Debt Service Coverage Ratio Loan Work?

The debt service coverage ratio loan is designed specifically for those looking to purchase an investment property with no income verification required. It takes into account the current rent of the property if it is currently rented, or market rents in the area if it is not. The lender compares this rent to the proposed monthly mortgage payment and as long as the rent covers 125% of principal interest tax and insurance payments, you have yourself a deal!

It’s important to note that while these loans do not require income verification from borrowers, there are some requirements that must be met in order for you to qualify for this type of loan. These requirements can include having good credit, being able to provide proof that you have saved money for a down payment and closing costs, and having sufficient liquid assets stored away in case of emergency repairs or other unforeseen circumstances. Additionally, many lenders will want assurance that your rental income will cover the mortgage payment before they approve your loan application.

Another thing to consider when taking out a debt service coverage ratio loan is whether or not you will be able to pay off your mortgage faster by using extra cash flow from your rental income instead of paying off debts like student loans or car payments first. Paying off these debts faster can help build up your credit score much faster than simply making minimum payments on them each month. And having good credit can open up more doors when it comes time for getting approved for financing an investment property.

When considering purchasing an investment property without employment income verification, look into a debt service coverage ratio loan option as one potential path forward. As long as your proposed monthly mortgage payment is covered by 125% of the current or market rent on the property and all other requirements are met, then you could potentially get yourself an incredible deal on real estate with little hassle involved! But always remember—before committing to any kind of financing option—to do plenty of research so that you make sure you're making an informed decision about what is best for your financial situation. Good luck!


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