Can I use conventional on my first property and DSCR on subsequent ones?

Yes—this is a smart strategy. Conventional on your first property (best rates if you qualify), then DSCR on deals 2-5+ (scales without DTI limits). LYNK Mortgage can help with deal 2 and beyond.

What's the typical cost difference between DSCR and conventional?

DSCR is 1.5-3% more expensive in interest rate. On a $400k loan: conventional $2,000/month payment at 4.5%, DSCR $2,300/month at 7.0%. Over 30 years, DSCR costs ~$100k more in total interest. But it enables portfolio scaling conventional can't.

Is a portfolio loan worth seeking out if I can get DSCR?

Not usually—DSCR is nearly as good (6-8% rates) and more widely available. Portfolio loans have advantage of moderate rates but disadvantage of bank-specific lock-in. DSCR is more flexible.

Should I use bridge for my first deal?

Only if it's a fix & flip or you need capital deployed very quickly (7-day close). For a stabilized rental where you have time, DSCR is better (longer terms, lower rates). LYNK Mortgage offers both products.

How to Finance a Rental Property: Options and Comparison

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Quick Facts

Primary Option

DSCR for investors

Best Rates

Conventional (if qualified)

Fastest Close

Bridge/hard money

Most Flexible

Portfolio loans

LYNK Mortgage Specialty

DSCR + fix & flip

Financing a rental property has four main paths: conventional loans (4-5% rates, strict qualification), DSCR loans (6-8% rates, no tax returns), portfolio loans (5-6% rates, bank-specific), and bridge/hard money (8-12% rates, quick close). The right choice depends on your credit, down payment, timeline, and property's cash flow.

Option 1: Conventional Mortgage (4-5% rates)

Conventional loans are issued by banks for owner-occupied or rental properties if you have strong personal income and credit (700+). Requirements: 20-25% down, debt-to-income ratio <43%, full financial documentation (tax returns, W2s, bank statements), 30-45 day close. Advantage: lowest rates (4-5%) and longest terms (30 years). Disadvantage: counts portfolio properties against DTI, so you hit a ceiling at 10 properties; personal income must be strong. Best for: first one or two investment properties where you have excellent income and credit.

Option 2: DSCR Loan (6-8% rates, LYNK Mortgage's specialty)

DSCR loans are issued by portfolio lenders and securitization shops for rental properties. Requirements: 620+ credit, 20%+ down, property DSCR 0.75+, entity structure (LLC). No tax returns, no DTI calculation, no personal income verification. LYNK Mortgage closes in 10 days. Advantage: scales (no property count limit), fast, easy qualification, good for self-employed or complex income. Disadvantage: higher rates (6-8% vs 4-5% conventional), stricter DSCR requirement (property must cash flow). Best for: investors building portfolios (3+ properties), self-employed investors, anyone who wants to scale without DTI limits.

Option 3: Portfolio Loan (5-6% rates, bank-specific)

Some banks keep loans in-house (portfolio) instead of selling to Fannie Mae. These loans have rates between conventional and DSCR. Requirements vary by bank but typically: 25% down, 640+ credit, property DSCR 1.0+, tax returns preferred but flexible. Close in 20-30 days. Advantage: moderate rates and no DTI limits (like DSCR). Disadvantage: bank-specific (not portable; if the bank changes lending policies, you're stuck), limited availability, less aggressive underwriting (tougher than DSCR). Best for: borrowers with strong income and credit who want moderate rates without conventional bank limits.

Option 4: Bridge/Hard Money (8-12%+ rates, quick close)

Bridge loans and hard money are short-term (6-24 months) asset-based loans for fix & flip or bridge scenarios. Requirements: 25-30%+ down, property has exit strategy (refinance, sale, ARV analysis), credit check but less strict than DSCR. Close in 7-10 days. Advantage: fastest close, flexible underwriting, works for rough properties (fix & flip). Disadvantage: expensive (8-12%+ rates), short terms (you must refinance or sell within 12-24 months), prepayment penalties common. Best for: flipping projects, bridge-to-perm scenarios, deals where speed matters and property is rough.

Comparison Table: Which Option Fits Your Deal?

Strong W2 income + 700+ credit + 1 property: Conventional (save 2% on rates). Self-employed or building portfolio: DSCR (LYNK Mortgage, 10-day close). Need moderate rates + scale: Portfolio loan (if you can find one; limited availability). Flipping a house or bridging: LYNK Mortgage hard money or fix & flip product (8-10 days). Unstable credit but strong deal: Hard money (8-12% rate). Each path has trade-offs. LYNK Mortgage can help you model multiple options and choose the lowest cost for your timeline.

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LYNK Mortgage offers fix & flip loans, new construction loans, multi-family bridge loans, and DSCR rental loans to real estate investors.

Disclaimers: LYNK Mortgage makes loans solely for business purposes (and not for personal or consumer use) and is exempt from licensing in all states in which it operates. LYNK Mortgage does not lend on owner-occupied properties. Listed rates, terms, and conditions are offered only to qualified borrowers, may vary by loan product, deal structure, property state, or other applicable considerations, and are subject to change at any time without notice. No information on this site is intended to, or shall, create a legally binding commitment or obligation on the part of LYNK Mortgage and all terms are expressly subject to LYNK Mortgage's credit, legal, and investment approval process.

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