What aspects effect your Credit card debt Protection Ratio(DCR) ? – Score: 2

5 thoughts on “What aspects effect your Credit card debt Protection Ratio(DCR) ? – Score: 2”

  1. Your mortgage payment doesn’t have to increase. Okay cool valuation goes up, but your debt doesn’t have to go up. Break the connection.

  2. You could just set a fixed loan amount that isn’t driven by an LTV ratio. Reverse your calculation so the LTV is calculated by a fixed LA rather than the other way around.

  3. 20 year lender and investor here. Banks (in the US) typically lend on the lower of a percentage of the appraised value or the purchase price. 9.5 out of 10 times the appraised value is the exact purchase price or greater. Maybe in Canada they will lend beyond a certain percentage of the pp (if it appraises higher) but that sounds like horrible lending fundamentals IMO.

  4. This is interesting. A lot of good responses below. I typically take the same approach as you when beginning my evaluation. I tie my debt amount to a dcr calculation. That way, changes in noi are reflected in the debt load. However, as we get closer to close, we usually will lock into the lesser of either the LTV or DSCR. Of course, if you break that connection between debt and dcr, you will open up a gap in financing as you change inputs.

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