Closing costs on DSCR Loan?

Mortgage Brokers & Lenders
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Closing costs on DSCR Loan?

John Matthew Johnston
Investor · Beaver Falls, PA · Member since 2015 · 275 posts · 82 votes

Can someone give me a round about number on how much closing costs should be ?

4 unit off market property

We found the property and no realtor was involved

Purchase price $450,000

20% down( 90,000)

We are going through a broker

Our loan product is a DSCR loan 30year fixed with a 5 year pre pay penalty.

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Nate HerndonPro Member
Lender · Springfield, MO · Member since 2023 · 277 posts · 195 votes
10mo

@John Matthew Johnston

I personally am a broker and here's what I would send to a client who was looking to see best loan terms vs. an adjustment to the fees. The fees below show 1- to 2-point loan and how that affects the rate.

[email protected]417-605-2196
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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    10mo

    @John Matthew Johnston

    folks will probably chime in with low-ish estimates but in my experience closing costs can be fairly robust if you're going through a broker, and depending on whether you are buying down the rate or not.

    could be 1-2 pts to broker and 1-2 to lender

    plus the usual title and closing costs

    1Reply
  • John Matthew Johnston
    OP
    Investor · Beaver Falls, PA · Member since 2015 · 275 posts · 82 votes
    10mo

    @Nicholas L.

    Thanks for the reply

    The broker is being very non specific about costs . All he is telling me is it will be around 6% of the loan.

    0Reply
    • Erik EstradaBusiness Member
      Lender · Member since 2022 · 6k+ posts · 1k+ votes
      10mo
      Quote from @John Matthew Johnston:

      @Nicholas L.

      Thanks for the reply

      The broker is being very non specific about costs . All he is telling me is it will be around 6% of the loan.

       Ask for a rate sheet, and ask if he is collecting any yield-spread premium. If you want the bottom-line, he will tell you how much he's making and provide you the par rates. 

      Also ask if the rate is locked prior to full loan approval or once the loan is approved. This to me is a huge deal breaker. You can have thousands of lenders/brokers telling you attractive terms, but they will mean nothing unless it is locked PRIOR to full approval. This will give you a peace of mind knowing that your terms are locked for 30-45 days. 

      [email protected]818-269-7983
      LuxePrivate Investments LLC 572 Reviews
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      0Reply
  • Derek BrickleyBusiness Member
    Lender · Ann Arbor, MI · Member since 2021 · 663 posts · 226 votes
    10mo

    Hey John!

    Every deal will totally be different.  Assuming title, taxes, insurance are equal across the board overall costs would typically be about $1,250 in lender charges, appraisal maybe $700-900, credit report for $100.  

    You'll have one year of home owners insurance, setup for your escrow account which could be ~$1.5k or so, then you'd likely see title around $3,600.  Don't forget your transfer tax which will be about $4,200.  Then you have tax prorations as well to the seller reimbursing them for the portion of the year they won't own the property.  

    That's about what we saw with an investor in PA last week anyways

    [email protected]734-645-7722
    Gold Star Mortgage Financial Group548 Reviews
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    2Reply
  • Quinton Brown
    Lender · Seattle WA · Member since 2025 · 211 posts · 33 votes
    10mo

    Quick heads up: estimates and rates can look totally different depending on how the loan is structured. Higher closing costs usually come with lower rates, and lower closing costs usually mean higher rates. There’s no “right” option — it just depends on what’s more important to you and how long you plan to hold the property.

    And if you're looking at a DSCR loan, make sure the prepay penalty structure actually lines up with your goals. A lot of investors overlook that part until it's too late. Also, when you're comparing estimates, make sure it's apples-to-apples.

    Check that the taxes and insurance numbers are realistic — some brokers leave those out to make the quote look better on paper. If you want, email me  and I can send you an estimate to review.

    2Reply
  • Nate HerndonPro Member
    Lender · Springfield, MO · Member since 2023 · 277 posts · 195 votes
    10mo

    @John Matthew Johnston

    I personally am a broker and here's what I would send to a client who was looking to see best loan terms vs. an adjustment to the fees. The fees below show 1- to 2-point loan and how that affects the rate.

    [email protected]417-605-2196
    3Reply
  • John Matthew Johnston
    OP
    Investor · Beaver Falls, PA · Member since 2015 · 275 posts · 82 votes
    10mo

    @Nate Herndon

    He says he has been at a 6.25 30 year fixed. We picked the 5 year pre payment penalty to get that rate. My credit score is 833

    1Reply
    • Nate HerndonPro Member
      Lender · Springfield, MO · Member since 2023 · 277 posts · 195 votes
      10mo
      Quote from @John Matthew Johnston:

      @Nate Herndon

      He says he has been at a 6.25 30 year fixed. We picked the 5 year pre payment penalty to get that rate. My credit score 833


      That is a REALLY strong rate for a 2-4 unit property. Typically I only see that for single-family homes right now. However, if your property checked all the right boxes (and given your strong credit), there is a program that executes well and is at the terms below. 

      • 6.075% rate
      • 30-year fixed
      • 5 year PPP (5/4/3/2/1)
      • 2 point origination (or 6.225% for 1 point origination)
      • $1,495 underwrite/admin fee

      Hopefully this gives you a good idea of the different terms that are available out there. Feel free to reach out if you'd like a closer look. Hopefully your broker can get you some concrete terms/costs soon as well.

      [email protected]417-605-2196
      1Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    10mo

    @John Matthew Johnston

    i sent you a PM / request - just wanted to connect as i see you're local.

    0Reply
  • Dominic Marshall
    Investor · Member since 2025 · 17 posts · 4 votes
    10mo

    To find the best loan terms, request term sheets from several lenders, these documents contain all the key details you need, such as interest rates, fees, and conditions. Compare them side by side to determine which lender offers the most favorable option. If you're working with a broker, be sure to ask for their compensation terms as well. For reference, I recently refinanced into a DSCR loan at a 6.8% rate with no points paid.

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    10mo

    Underwriting and processing $1-$2k. I wouldn't pay more than 1.5 points on this type of loan- we typically are around 1-1.5pts

    rest are typical costs 

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    0Reply
    • Erik EstradaBusiness Member
      Lender · Member since 2022 · 6k+ posts · 1k+ votes
      10mo
      Quote from @Chris Seveney:

      Underwriting and processing $1-$2k. I wouldn't pay more than 1.5 points on this type of loan- we typically are around 1-1.5pts

      rest are typical costs 


       On the broker side, you can price a no point option for the borrower, and receive your commission from the lender. It really comes down to what the commission is, and the rate he is getting. 

      [email protected]818-269-7983
      LuxePrivate Investments LLC 572 Reviews
      WebsiteView Page
      0Reply
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