DSCR Loan @ 703 Score-Will I Go below 700 During the Very Process

Denver, Colorado
Private Lending & Conventional Mortgage Advice
4yFollow

DSCR Loan @ 703 Score-Will I Go below 700 During the Very Process

Burt L.
Real Estate Investor · Steamboat, CO · Member since 2010 · 295 posts · 34 votes

To get a better rate on a DSCR loan, a borrower is supposed to have at least a 700 Credit Rating. My mid-score is a 703 which puts me on the edge and in the higher rate environment anyone would like to at least minimize the interest rate as best as can be done.

My concern is that just by loan shopping I'll drop below 700 due to the credit inquiries. I've read here that using a mortgage broker results in only one credit pull but just who is a reliable, wide-ranging loan broker of the newer DSCR loans has proven elusive. There are supposed to be 10-12 large national DSCR lenders, but those have also been hard to identify.

 I'm sure credit also gets pulled again, just before closing. How can I avoid dropping into the higher interest rate range just by the act of loan shopping, itself?

0Reply
17 views

5 Replies

Jump to latestLatest
  • Lyndsay Zwirlein
    Lender · Member since 2020 · 331 posts · 209 votes
    4y

    You get a 30 day window to shop around and have lenders pull your credit with no impact to your score!

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    4y
    Quote from @Burt L.:

    To get a better rate on a DSCR loan, a borrower is supposed to have at least a 700 Credit Rating. My mid-score is a 703 which puts me on the edge and in the higher rate environment anyone would like to at least minimize the interest rate as best as can be done.

    My concern is that just by loan shopping I'll drop below 700 due to the credit inquiries. I've read here that using a mortgage broker results in only one credit pull but just who is a reliable, wide-ranging loan broker of the newer DSCR loans has proven elusive. There are supposed to be 10-12 large national DSCR lenders, but those have also been hard to identify.

     I'm sure credit also gets pulled again, just before closing. How can I avoid dropping into the higher interest rate range just by the act of loan shopping, itself?


    Just work with a broker that works with multiple DSCR lenders. You will certainly get a higher rate going retail and shopping around. An example I like to give is one client that went with the same bank that I work with got quoted at 6.75% going Retail. Going the broker route, he was quoted at 5.99%.

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    4y
    Quote from @Lyndsay Zwirlein:

    You get a 30 day window to shop around and have lenders pull your credit with no impact to your score!


     This is correct - do it all within a 30-day window and it will be just one pull

    [email protected]
    Harpoon Capital514 Reviews
    WebsiteView Page
    0Reply
  • Marty JohnstonPro Member
    Lender · Wauwatosa, WI · Member since 2016 · 571 posts · 203 votes
    4y
    Quote from @Burt L.:

    To get a better rate on a DSCR loan, a borrower is supposed to have at least a 700 Credit Rating. My mid-score is a 703 which puts me on the edge and in the higher rate environment anyone would like to at least minimize the interest rate as best as can be done.

    My concern is that just by loan shopping I'll drop below 700 due to the credit inquiries. I've read here that using a mortgage broker results in only one credit pull but just who is a reliable, wide-ranging loan broker of the newer DSCR loans has proven elusive. There are supposed to be 10-12 large national DSCR lenders, but those have also been hard to identify.

     I'm sure credit also gets pulled again, just before closing. How can I avoid dropping into the higher interest rate range just by the act of loan shopping, itself?


     I'll echo what the others have said, but let me also add a few comments:

    1. Are you basing your 703 mid-score based on which Credit Provider? There are almost a dozen scoring models out there, which is why many people check their Credit Karma, Credit Sesame, etc, and are quite frustrated when the lenders looks at credit and sees score 20-30 pts less (or greater), its because a consumer report often utilizes a different FICO scoring model. FICO 8 is currently at popular one, and I've found it to be one of the closest scoring models to a conventional lenders scoring (some of the big lender credit-providers are CBC Innovis, now joined with Factual Data, or Factual Data by CBC). A few service providers that use FICO8 scoring:
       1. MySCOREiq or identityIQ [same parent companies] - my personal favorite, and also offers a "what-if" simulator to see how certain 'moves' will affect your scores >> 
       2. myFICO - very similar
       3. Credit Check Total - I believe now also using FICO8
       4. There are others

    2. There are also DSCR / Commercial lenders who only conduct a soft pull. If you're on the brink, and are worried about the credit inquiries, go with one of these lenders! It will help avoid the issue.

    Sent you a DM in case you'd like to chat further, hope this helps!

    [email protected]414-600-0123
    0Reply
  • Tarik Turner
    Lender · Hackensack, NJ · Member since 2016 · 1k+ posts · 372 votes
    4y
    If you are just shopping for rates, most lenders can give you a quote based on a stated credit score, screenshot of credit or a free report.
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free