DSCR Glossary

• Net Operating Income (NOI)

  Income after operating expenses, before debt

• PITI

  Principal, interest, taxes and insurance

• Mortgage Calculator

  Tool that computes a loan payment from amount, rate and term

• Loan-to-Value Ratio (LTV)

  Loan amount as a share of property value

• Debt-to-Income Ratio (DTI)

  Borrower's monthly debts as a share of income

• Amortization Calculator

  Splits each payment into principal and interest over the loan's life

• Commercial Mortgage

  A loan secured by income-producing property

• Mortgage

  A loan secured by real property

• Amortizing Loan

  A loan whose payments retire the balance over the term

• Interest-Only Loan

  Payments cover interest only for a set period

• No Doc Loan

  Pre-2008 mortgage with no income verification

• Stated Income Loan

  Borrower declares income without documentation

• Dodd-Frank Wall Street Reform and Consumer Protection Act

  The 2010 law behind ability-to-repay and qualified mortgage rules

• Buy to Let

  UK rental property mortgage, underwritten on rent coverage

• Times Interest Earned (Interest Coverage Ratio)

  Earnings divided by interest expense

• Capitalization Rate

  NOI divided by property value

• Commercial Property

  Real estate held to produce income

• Real Estate Appraisal

  Professional opinion of value and market rent

• Nonrecourse Debt

  Loan where the lender can claim only the collateral

• Hard Money Loan

  Short-term, asset-based loan from a private lender

• Financial Ratio

  One financial figure divided by another

• Cash Flow

  Money moving in and out over a period