Have you heard of the commercial mortgage term, "Debt Service Coverage Ratio?" It's the term to describe the ratio that lenders use to evaluate and qualify for the financing of a commercials structure. It shows the cash flow compared to debt service. DSCR For Commercial Properties In general, most banks will need a ratio of 1.5 - 1.35 (net operating income to annual debt service) before lending for commercial property. They just want to make sure you will have enough cash flow to cover the payments each month. Net operating income should include interest, principal, lease payments and sinking fund.
Hard money loan rates vary based on the lender you choose, the amount of your loan and the term of your loan. So what does that mean to you? Hard Money Loan Rates: Your Mileage WILL Vary Hard money loans are typically short-term loans. The sooner you pay them off, the less you’ll end up paying in interest – just like most other types of loans. What’s different about hard money loan rates is that they aren’t necessarily dependent on the same factors as traditional loans are. Rather than deciding whether you’re at-risk for nonpayment based on your credit history