What is the significance of DSCR in loan underwriting? in Connecticut
DSCR is a cornerstone of loan underwriting. Lenders rely on DSCR to assess the borrower's ability to repay the loan and manage the associated risks. A strong DSCR increases the likelihood of loan approval and favorable terms.
DSCR Loans in Connecticut
Population
3,605,944
Avg Days on Market
55 days
Market Highlight
High property taxes but premium locations
Annual Appreciation
2.8%
Avg Property Tax
$5,800/yr
Related Questions
What is DSCR?
DSCR stands for Debt Service Coverage Ratio. It's a key financial metric used to assess a borrower's ability to repay their debt obligations. It's calculated by dividing the borrower's net operating income (NOI) by their total debt service.
How is DSCR calculated?
DSCR is calculated using the following formula: \n\n DSCR = Net Operating Income (NOI) / Total Debt Service \n\n NOI represents the income generated from a property after deducting operating expenses. Total Debt Service includes principal and interest payments on all loans associated with the property.
How does DSCR affect loan affordability?
DSCR directly impacts loan affordability. A higher DSCR means the borrower can afford a larger loan amount while still maintaining a healthy financial cushion. Lenders use DSCR to determine the maximum loan amount they're willing to offer.