DSCR Investment Loan
The DSCR or debt service coverage ratio is the relationship of a property’s annual net operating income (NOI) to its annual mortgage debt service (principal and interest payments).
Commercial lenders use the DSCR to analyze how large of a commercial loan can be supported by the cash flow generated from the property, or to determine how much income coverage there is at a certain loan amount.
Two of the most important factors used to determine the approvability of a commercial mortgage request are the DSCR and loan-to-value (LTV). Often times the loan amount may be debt service constrained and the maximum LTV not obtainable.
Calculating the debt service coverage ratio
he DSCR calculation is rather simple. A business’s DSCR is calculated by taking the property’s annual net operating income (NOI) and dividing it by the property’s annual debt payment. The DSCR is typically shown as a number followed by x.
DSCR Investment Loan - Eligibility
Income limits apply and may change based on geographical areas. A minimum credit score is required.
Features of DSCR Investment Loan
All loans are not created equal, DSCR Investment Loan has become a great option for people to use.