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The debt service coverage ratio (DSCR), also known as "debt coverage ratio" (DCR), is a financial metric used to assess an entity's ability to generate enough cash to cover its debt service obligations, such as interest, principal, and lease payments. The DSCR is calculated by dividing the operating income by the total amount of debt service due.
What is a good debt-service coverage ratio? Most lenders want to see a debt-service coverage ratio of at least 1.25. But, lender requirements will vary depending on the type of business loan and ...
Lenders usually require a minimum debt service coverage ratio which typically ranges from 1.1 to 1.4; the ratio is net cash flow (the income the property produces) over the debt service (mortgage payment). As an example if the owner of a shopping mall receives $300,000 per month from tenants, pays $50,000 per month in expenses, a lender will ...
Mortgage constant, also called "mortgage capitalization rate", is the capitalization rate for debt. It is usually computed monthly by dividing the monthly payment by the mortgage principal. An annualized mortgage constant can be found by multiplying the monthly constant by 12 or by dividing the annual debt service by the mortgage principal. [1]
Private mortgage insurance (PMI) is a form of insurance taken out by the lender but typically paid for by you, the borrower, when your loan-to-value (LTV) ratio is greater than 80 percent (meaning ...
mortgage document More often than not, you're dealing with terms and conditions on various mortgage types that may be so difficult to understand that you just want to pull out your hair.
Minimal DSCR set for a project depends on riskiness of the project, i.e. on predictability and stability of cash flow generated by it. Related to this is the Project life cover ratio (PLCR), the ratio of the net present value of the cash flow over the remaining full life of the project to the outstanding debt balance in the period.
In economics and government finance, a country’s debt service ratio is the ratio of its debt service payments (principal + interest) to its export earnings. [1] A country's international finances are healthier when this ratio is low.