How is DSCR calculated?

Answered by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker

DSCR equals the property's gross monthly rent divided by its full monthly payment (principal, interest, taxes, insurance, and any HOA). A $2,400 rent against a $2,000 payment is a 1.20 DSCR.

A ratio of 1.0 means rent exactly covers the payment; above 1.0 is positive cash flow. Higher ratios earn better terms. We'll run the calculation using market rent from the appraisal.