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A tip from Mike: run the numbers with a little less rent than you expect. If it still works, you’ve got a cushion.
What DSCR do lenders like to see?
The short version: 1.0 or higher is the target. Higher usually means more options.
What the number means
- Above 1.0: the rent covers the payment, with a cushion.
- Exactly 1.0: the rent covers the payment and nothing more.
- Below 1.0: the rent falls short. Some programs still work here, usually with trade-offs.
A stronger DSCR can also help your pricing, depending on the program.
If your number is tight
- Put more down to lower the payment.
- Shop your insurance. It’s part of the payment.
- Make sure the rent estimate reflects the real market.
- Ask about a buydown to lower the rate.
A tip from Mike: run the numbers with a little less rent than you expect. If it still works, you’ve got a cushion.Questions? Call or text me at 781-820-4249.
For educational purposes only. Not a commitment to lend. Programs, terms and eligibility vary and are subject to change.