DSCR Loans with Little to no Closing Cost

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DSCR Loans with Little to no Closing Cost

Ojam Dawson
Member since 2022 · 7 posts · 3 votes

I have a single family rental property in PA that I'm trying to refinance into a DSCR Loan. But every lender is asking for a high end closing cost, which leaves me with virtually nothing to pull out from this home.

Any resources, referrals to any lender that has a low closing cost deal?

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Devin PetersonBusiness Member
Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 664 votes
2y
Quote from @Ojam Dawson:

I have a single family rental property in PA that I'm trying to refinance into a DSCR Loan. But every lender is asking for a high end closing cost, which leaves me with virtually nothing to pull out from this home.

Any resources, referrals to any lender that has a low closing cost deal?


 What sort of terms are you getting back from current lenders? Can you give some insight on the value, loan amount, quoted points and fees this far? That would help. If it’s lower balance loan (less than 150k) the rates slowly begin to get higher. Reason being is servicing on the backed costs the lender same amount of money and man power to service a 1M loan as it does for a 100k loan. Hope that helps!

[email protected]860-538-3672
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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @Ojam Dawson:

    I have a single family rental property in PA that I'm trying to refinance into a DSCR Loan. But every lender is asking for a high end closing cost, which leaves me with virtually nothing to pull out from this home.

    Any resources, referrals to any lender that has a low closing cost deal?


     Hey Ojam, 

    Depending on the LTV, you may be able to finance the points on a DSCR loan. I will say that these loans are expensive compared to a traditional loan.

    I would suggest shopping it and doing your due diligence before pulling the trigger. Many lender's have different guidelines. 

    [email protected]818-269-7983
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    1Reply
  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 664 votes
    2y
    Quote from @Ojam Dawson:

    I have a single family rental property in PA that I'm trying to refinance into a DSCR Loan. But every lender is asking for a high end closing cost, which leaves me with virtually nothing to pull out from this home.

    Any resources, referrals to any lender that has a low closing cost deal?


     What sort of terms are you getting back from current lenders? Can you give some insight on the value, loan amount, quoted points and fees this far? That would help. If it’s lower balance loan (less than 150k) the rates slowly begin to get higher. Reason being is servicing on the backed costs the lender same amount of money and man power to service a 1M loan as it does for a 100k loan. Hope that helps!

    [email protected]860-538-3672
    ProAlpha Capital56 Reviews
    WebsiteView Page
    1Reply
  • Chad Davis
    Lender · Richmond VA · Member since 2012 · 305 posts · 30 votes
    2y

    @Ojam Dawson Happy to take a look but need more information. There are quite a few things they may be leading high costs. Low property value and amount financed, escrows ( I don't consider as you have to pay tax and insurance anyhow), origination fees because of the low dollar amount

    0Reply
  • Ojam Dawson
    OP
    Member since 2022 · 7 posts · 3 votes
    2y

    @Chad Davis let's link up to see how best we can help each other.

    Thanks

    0Reply
  • Chad Davis
    Lender · Richmond VA · Member since 2012 · 305 posts · 30 votes
    2y

    @Ojam Dawson Sent PM 

    0Reply
  • Kristen L GarnerBusiness Member
    Lender · Phoenix, AZ · Member since 2021 · 451 posts · 287 votes
    2y

    Hi, I'd be happy to take a look at your scenario. There are ways to structure different DSCR products to eliminate UW fees and origination costs or wrap them into the loan.

    [email protected]213-880-0434
    0Reply
  • Jay HurstBusiness Member
    Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
    2y
    Quote from @Ojam Dawson:

    I have a single family rental property in PA that I'm trying to refinance into a DSCR Loan. But every lender is asking for a high end closing cost, which leaves me with virtually nothing to pull out from this home.

    Any resources, referrals to any lender that has a low closing cost deal?


    Any reason you cannot qualify for a conventional loan? DSCR terms are simply worse then a conventional loan meaning you will have higher closing costs and likely a pre-payment penalty (which can be even more expensive in the long run then the upfront closing costs). DSCR programs are great when they are the only choice.

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  • Ojam Dawson
    OP
    Member since 2022 · 7 posts · 3 votes
    2y

    Hi Jay,

    The house is owned by an LLC, and I'm not sure an FHA or a conventional loan will furnish such a loan with a business entity. If they will, please I need some tips on that.

    0Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    2y

    Negotiate with the lender.

    0Reply
  • Ojam Dawson
    OP
    Member since 2022 · 7 posts · 3 votes
    2y

    @Account Closed I will surely be getting in touch.

    0Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    2y

    what is the cost you are looking at in terms of both $ and %

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    0Reply
  • Sophia Buesing
    Lender · Denver · Member since 2023 · 127 posts · 26 votes
    2y

    DSCR loans tend to have more costs. I would go to local real estate investor facebook groups for referrals. For dscr loans it is pretty standard to charge minimum 1-2 points.

    0Reply
  • Jacob Sherman
    12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
    2y
    Quote from @Ojam Dawson:

    I have a single family rental property in PA that I'm trying to refinance into a DSCR Loan. But every lender is asking for a high end closing cost, which leaves me with virtually nothing to pull out from this home.

    Any resources, referrals to any lender that has a low closing cost deal?


     You should be able to do this with no points and just a standard underwriting fee . Is it a low loan amount and lenders are charging points for that ? As far as closing costs you'll only need to have taxes, insurance and title . 

    0Reply
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