The jargon, translated

Gross monthly rent divided by the property’s full monthly payment. A DSCR of 1.20 means the rent covers the payment with 20% to spare. The single number that runs investor lending.

Principal, Interest, Taxes, Insurance, and Association dues — the full monthly payment, and the denominator in the DSCR formula. Forgetting the "A" is the classic rookie miscalculation.

Your monthly debts divided by your monthly income — the conventional world’s gatekeeper ratio. The one DSCR loans famously ignore.

Loan amount divided by property value. 75% LTV means 25% down (or 25% equity on a refi). Lower LTV generally unlocks better non-QM pricing and looser DSCR minimums.

The appraiser’s opinion of market rent for the property. On vacant properties it usually IS the rent figure in your DSCR; on leased properties, programs often use the lower of lease vs. 1007.

Real Estate Owned — your list of every property you hold: value, loan, payment, rent. Underwriters use it to see the whole portfolio, and organized investors keep theirs current in a spreadsheet.

The percentage haircut applied to business bank-statement deposits to approximate operating costs — often around 50% by default, frequently reducible with a CPA letter describing your actual expense ratio.

A short letter from your accountant confirming self-employment history, business expenses, or P&L accuracy. Pound for pound, the highest-leverage document in self-employed lending.

A fee for paying the loan off early, common on DSCR loans, usually structured as a step-down (e.g., 3-2-1% over three years). You trade exit flexibility for better pricing — and can often buy it down or out.

A period (commonly 10 years) where payments cover only interest. Lower payment → higher DSCR → deals that pencil. The trade: no principal paydown during the IO window.

Stretching the paydown schedule to 40 years to shrink the monthly payment. Slower equity build, stronger monthly cash flow — a lever, not a lifestyle.

Taking title in a limited liability company instead of your personal name — for liability separation and portfolio strategy. Widely allowed on DSCR loans, generally not on conventional owner-occupied loans.

Replacing a loan with a bigger one and pocketing the difference in equity. The "repeat" gear in BRRRR — DSCR cash-outs let a stabilized rental fund the next acquisition.

Buy, Rehab, Rent, Refinance, Repeat — the recycling strategy: short-term money buys and fixes the property, a DSCR refi returns your capital, and you go again.

What the property will be worth once renovated. Fix-and-flip loans are sized against it; your rehab budget’s credibility lives and dies by it.

Liquid funds left after closing, measured in months of PITIA. The cushion that covers a vacancy or a surprise furnace — and a standard non-QM requirement that scales with your portfolio.

A loan for investment/business use rather than personal occupancy — the legal category DSCR loans live in, and why they can’t finance the home you live in.

Non-Qualified Mortgage: fully underwritten lending that uses alternative documentation (cash flow, statements, assets) instead of the standard tax-return box. Different standards, not lower ones.