DSCR Customizable Flyer
Debt Service Coverage Ratio, or DSCR, is a formula for determining a borrower’s ability to repay a mortgage using the income from investment property.
Quite literally, it calculates the ratio of property income to the amount of money needed to service the debt incurred by taking out the mortgage.
The key consideration in evaluating loan eligibility is how much additional income — usually in the form of rent — the asset generates after all debt obligation is subtracted.
For example, if the loan program requires a 1.25x DSCR, the property must generate an additional 25% of income over and above the cost of repaying the loan (gross monthly rental income / PITIA).
A DSCR loan is often used by property investors — whether they own rental properties or second homes — to generate proceeds for growing their asset portfolio.
To learn more about DSCR loans, or to discuss if one may work for you, please reach out to me by email or phone. I’d be happy to walk you through the process and discuss your financing needs.
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