Mortgage versus debt service

5 Replies

Since a multi-family property is reviewed as a business operation from a lenders perspective. The property complex has to qualify for a mortgage, which means it must prove income worthy. Here's where the debt service ratio comes in to play basically you have to prove you'll collect enough rent to cover the mortgage payments.

@Monica Litster they are the same.  Technically a mortgage is a security instrument for promissory note. A "mortgage payment" or "debt service" are simply the payments on that loan and are simply different terms for the same thing.

Thank you. I was asking be cause a guy I listened to said if you used the word mortgage versus debt service regarding apartments, you will sound like a noob. I didn't think that was the case.