Escrow
A neutral third-party account holding funds (or documents) during a real estate transaction. At closing, escrow disburses funds to the seller, lender, and various service providers. DSCR loans may also include monthly escrow accounts for property tax and insurance payments.
Why it matters on a DSCR loan
Investors encounter escrow twice on a DSCR deal: once as the closing table where funds change hands, and again as the optional monthly account that spreads taxes and insurance across the year. Budgeting mistakes happen when investors forget that escrow setup at closing often requires prepaying several months of taxes and insurance upfront, which raises cash-to-close beyond the down payment. If you self-manage taxes and insurance instead, make sure your cash-flow model still sets that money aside, because the DSCR calculation includes them either way.
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DSCR Calculator Get a QuoteReviewed by Arin Baghermian, Broker Owner — NMLS #1220456 · Last reviewed July 2, 2026 · DSCR Capital Partners is a brand of UTM Financial, LLC (NMLS #2591548).