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 debt payments. A higher DSCR signifies lower risk for the lender and may qualify borrowers for better loan terms and larger loan amounts[2, 3].
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Related Questions
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 tradi...
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 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...