DSCR Loans vs. Traditional Mortgages: What’s Best?

When it comes to financing an Investment Property Loan, the choice between a traditional mortgage and a DSCR loan can make or break your strategy. At AAA Capital Investment, Inc., our Prime DSCR and DSCR products offer a compelling alternative, emphasizing no tax returns, property income, and investor-friendly terms. Let’s explore how these DSCR loans stack up against conventional options and why they’re a top pick for real estate investors in 2025.

Traditional mortgages rely heavily on personal income, requiring tax returns, pay stubs, and a deep dive into your financial history. For investors with irregular income—like self-employed landlords—this can be a dealbreaker. In contrast, a DSCR loan from AAA Capital Investment, Inc. eliminates the need for tax returns. Our Prime DSCR program, designed for U.S. citizens and LLCs with at least 12 months of property management experience, evaluates the Debt Service Coverage Ratio instead. A property generating $5,000 in rent against a $4,000 mortgage payment qualifies with ease, no W-2s needed.

This focus makes DSCR loans ideal as an investment property loan. Take the DSCR product: it offers financing for non-warrantable condos and 2-4 unit properties, with cash-out refinances up to 75% LTV for ratios above 1.0. Traditional lenders often shy away from these property types or cap LTVs lower. A client recently used our DSCR loan to refinance a non-warrantable condo in Nevada, pulling out $400,000 without submitting tax returns. The process? One appraisal (for loans under $2 million) and a single month’s bank statement.

Compare that to conventional loans, where seasoning for credit events like bankruptcy can stretch to 7 years. Our DSCR program shortens this to 36 months, and Prime DSCR to 24 months, getting you back in the game faster. Reserves are another win: while traditional mortgages might demand 6-12 months upfront, our DSCR loans allow cash-out proceeds to satisfy this, enhancing liquidity for your next investment property loan.

Data backs the shift. Per CoreLogic, investment property purchases rose 14% in 2024, driven by rental demand. DSCR loans meet this surge head-on, offering terms like no tax returns and options for foreign nationals (up to 65% LTV under DSCR). Whether you’re scaling a portfolio or refinancing to renovate, AAA Capital Investment, Inc. delivers financing that traditional lenders can’t match. Ready to ditch the tax return hassle? Contact us to see how a DSCR loan can power your investments.