Arizona DSCR Loans
CoreVest helps fund DSCR projects for real estate investors with its fix and flip credit line and bridge products. Our approach to efficient underwriting and appraisal service relationships allows us to close deals quicker then our competition. The Arizona DSCR market is booming right now and many fix and flip investors have successfully leveraged their Capital with CoreVest. Whether it’s a complete fixer upper, or you need funds for a quick rehab to get the property purchased, CoreVest Can help you leverage a competitive DSCR loan in Arizona today.
Whether it’s a complete fixer upper, or you need funds for a quick rehab to get the property purchased, CoreVest Can help you leverage a competitive DSCR loan in Arizona today.
Product Overview
| LOAN DETAILS | |
|---|---|
| Loan Type | Purchase or refinance |
| Property Type | Single-family, 1-4 units, condo, townhome |
| Amount | $100k - $2M+ |
| Loan to Value (LTV) | Up to 80% value |
| Loan Term | 30-year term |
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.