Finance
A Vermont commercial property lender typically uses a 'debt service coverage ratio' (DSCR) to evaluate a loan application. A DSCR of 1.25 means:
AThe loan payment exceeds NOI by 25%
BThe property's NOI is 1.25 times the annual debt service (mortgage payment), providing a 25% cushion✓ Correct
CThe borrower must make a 25% down payment
DThe loan-to-value ratio is 1.25
Explanation
DSCR = Net Operating Income ÷ Annual Debt Service. A DSCR of 1.
Related Vermont Finance Questions
- Vermont's 'assumption of mortgage' without lender approval may violate the:
- A mortgage in Vermont creates which type of interest in the property for the lender?
- Under the Real Estate Settlement Procedures Act (RESPA), which of the following is prohibited?
- Vermont property owners who fall behind on their mortgage should be aware that Vermont's foreclosure redemption period allows:
- Vermont's 'homestead exemption' from property taxes (available in some contexts) or homestead declaration differs from which federal program?
- Vermont's usury laws historically set maximum interest rates on loans. Today, which federal law largely preempts state usury limits for first mortgage loans?
- A Vermont seller agrees to 'carry back' a second mortgage for the buyer. This is an example of:
- Which of the following is an example of seller financing?
Practice More Vermont Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Vermont Quiz →