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All Forum Posts by: Frank Pena

Frank Pena has started 0 posts and replied 1 times.

General Real Estate Investing

Post: Debt Service Ratio

Frank PenaPosted
  • Lender
  • 1040 S Federal Hwy Hollywood, FL 33020
  • Posts 1
  • Votes 1

Hello Steven, 

Basically Steven the ratio only works by calculating only the property your purchasing PITIA (debt) dividing by the income is going to generate.

If it covers the mortgage you are at a DSCR of 1, if you have profit the DSCR is going to be over 1, and if the income cant cover the mortgage DSCR will be under 1.

Now Steven every lender is different in what DSCR ratio they allow. Some lenders only do above 1 DSCR.

Some lenders do not care about the ratio and can still fund the loan, but the DSCR under 1 will cause a higher down payment and a higher rate.

Feel free to private message me so i can help you out more !!

Good luck !!

1 Vote