A safety mechanism
used by the lender to ensure that not every
dollar received from the net operating
income of an income producing property is
spent on mortgage repayment and that some of
it is left as a cushion.
The lender seeks
additional security to make sure that not
every dollar received is dedicated to
addressing the mortgage payments. A safety
margin is typically required by a lender
when when a mortgage application is made for
income producing or commercial property.
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