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Derek Bissen, December 19 2023

Here are 5 Game-Changing Strategies for Real Estate Investors to Optimize DSCR

Hey, Real Estate Investors! Qualifying for a DSCR (Debt Service Coverage Ratio) Loan can sometimes feel like solving a complex puzzle, right? But worry not! In this article, we're going to break down five transformative strategies to improve your DSCR ratio, turning those daunting figures into stepping stones towards your investment dreams. 

Plus, we've got a nifty alternative tucked up our sleeve for those needing an extra push.

Let's roll up our sleeves and dive in!

First, let's cover the basics

Imagine you're a chef preparing a gourmet dish. You wouldn't start without knowing your recipe, right? The same goes for DSCR loans. It's about balancing your rental income against your mortgage and other debts for the property. A higher ratio means a healthier financial dish that lenders will find appetizing.

Understanding Your Lender's Requirements

When it comes to DSCR loans, every lender has their secret sauce – a.k.a., their minimum DSCR ratio requirements. These can vary, so it's like picking the right ingredients for your recipe. Generally, a ratio of 1.00 or higher is the norm, but some might go as low as 0.75.


✅  Strategy 1: Supercharge Your Down Payment

Boost Your Down Payment 

It's like putting a stronger foundation under your investment property. More money down means less debt, and less debt means a better DSCR. It's a straightforward yet powerful move.

✅  Strategy 2: Trim Your Insurance Costs

Optimize Your Insurance Costs 

Think of this as trimming the fat off your expenses. A leaner insurance bill can make your DSCR ratio look a lot healthier without compromising coverage.

✅  Strategy 3: Lower Interest Rates Through Discount Points

Lower Interest Rates with Discount Points

Here's where you can be savvy. Buying discount points is like paying a little upfront to save a lot over time. Lower interest rates mean lower payments, which can beef up your DSCR ratio.

✅  Strategy 4: Leverage Seller Credits

Negotiate Seller Credits for Closing Costs

Use seller credits like a chess grandmaster. Apply them strategically to reduce your interest rates and closing costs. It's a smart move that can give your DSCR ratio a nice boost.

✅ Strategy 5: Smart Purchase Price Negotiation

Reevaluate the Purchase Price. It's all about negotiation 

If you can get the property for less, your loan amount drops, and your DSCR ratio improves. It's like haggling in a marketplace to get the best deal.

💡 Bonus Strategy: The No Ratio DSCR Path

Explore No Ratio DSCR Options

If the traditional path seems rocky, the No Ratio DSCR loan is like a bridge over troubled waters. It focuses more on your down payment and credit score, bypassing the usual ratio calculations.

⚙️ Extra Resources and Tools

How to Run Your Own DSCR Scenarios

Utilize our free tools like our own DSCR CALCULATOR to run your own loan scenarios for potential investments.

We lend in 29 states and aim to be your preferred lender for current and future real estate transactions. We're here to support your journey! Simply give us a call so we run some numbers for you and answer all your questions!

You can also drop us a line HERE »

Yours in successful homeownership,



Derek Bissen
Loan Originator
NMLS#365627
Unconventional Lending Program Director



Derek Bissen is a licensed Mortgage Loan Originator with over 25 years of experience in the industry. Derek is a self-employed lending expert who is known for his ability to work with borrowers who have substantial wealth and non-traditional lending needs. He is a creative loan structurer and specializes in portfolio lending, asset-based lending, bank statement lending, as well as traditional loans such as Conventional, FHA, VA, and first-time homebuyers. Derek's expertise in the mortgage industry is unparalleled. He is a trusted advisor to his clients, providing them with customized loan solutions that meet their unique financial goals and needs. His vast experience and knowledge make him a valuable asset to anyone looking to purchase a home or refinance their existing mortgage. As a highly-experienced loan originator and author, Derek is committed to sharing his knowledge with others. He regularly provides valuable insights and advice to readers looking to navigate the complex world of mortgage lending. His articles are informative, engaging, and backed by years of hands-on experience. With his wealth of knowledge and dedication to his clients, he is the go-to source for all your mortgage lending needs. If you're looking for a reliable and trustworthy mortgage expert, contact Derek today to learn more about how he can help you achieve your financial goals.

Written by

Derek Bissen

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