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What is the DSC ratio?

April 26, 2017DSC ratio

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What is the DSC ratio?

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The DSC or Debt Service Coverage is the amount by which available cash flows exceeds the mortgage payment. Typically lenders like to see DSC s of 1.20 to be comfortable with making a real estate loan, i.e., the amount of funds available for debt service is 20% more than the loan payments.