Arizona DSCR Loans

Arizona DSCR Loans – Frequently Asked Questions

What Arizona Property Types does CoreVest Finance lend on for DSCR?
We lend on Single-family, 1-4 units, condos and townhomes.

What are CoreVest Finance’s Arizona DSCR Rates?
CoreVest Finance offers competitive rates for DSCR loans. Rates vary due to investor’s past history and experience. For current rates, give us a call.

What is my turnaround time for an DSCR application?
We usually respond back to potential borrowers with a term sheet between 2-7 days.

How long will it take my DSCR Loan to close?
Our DSCR loans typically close within 20 days. Most of our DSCR Loans close within 4-6 weeks.

How Is an Arizona DSCR Loan Calculated?

Calculating the Debt Service Coverage Ratio (DSCR) involves a straightforward process that requires accurate financial data and a clear understanding of the numerator and denominator components. To ensure precise calculations, follow these step-by-step instructions:

Determine the Numerator:

Identify the net operating income (NOI) of the property or business.

Subtract any non-operating income and add back any non-operating expenses.

Exclude interest and taxes from the NOI.

Determine the Denominator:

Sum up all debt payments within a specific period, typically annually.

Include principal, interest, lease payments, and other relevant obligations.

Calculate DSCR:

Divide the numerator (NOI) by the denominator (debt payments).

The resulting value represents the DSCR.

Your Arizona DSCR Loan Calculation Example

To illustrate how DSCR is calculated, let’s consider an example of a borrower applying for a real estate loan from a bank:

Example:

Property value: $500,000

Loan amount requested: $400,000

Annual net operating income (NOI): $60,000

Annual loan payment: $30,000

DSCR Calculation:

Determine Net Operating Income (NOI): In this case, it is $60,000 per year.

Calculate Debt Service Payment (DSP): This represents the annual loan payment of $30,000.

Apply DSCR formula: Divide NOI by DSP ($60,000 / $30,000), resulting in a DSCR of 2.

In this example, the borrower has a DSCR of 2. A DSCR greater than 1 indicates that the property generates sufficient cash flow to cover its debt obligations.