What is a DSCR loan?
A DSCR loan, or Debt Service Coverage Ratio loan, is a type of mortgage designed for real estate investors. Unlike traditional mortgages, which primarily consider the borrower's personal income and creditworthiness, DSCR loans focus on the property's income-generating potential[1].
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Related Questions
How is the DSCR calculated?
The DSCR is calculated by dividing the property's net operating income (NOI) by its annual debt service (total principal...
What is a good DSCR ratio?
Lenders typically prefer a DSCR of 1.25 or higher, indicating the property generates 25% more income than needed for deb...
What are the benefits of a DSCR loan for real estate investors?
DSCR loans offer several advantages, including: * **Focus on property income:** Qualification is based on the propert...