What rates are you guys on DSCR loans

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Patrick Roberts
Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
2y

High 6s to low 8s

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  • Patrick Roberts
    Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
    2y

    High 6s to low 8s

    3Reply
  • Mohammed Rahman
    Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes
    2y

    DSCR in NYC areas has been trending north of 10%. Conventional hovering around the 6's.

    I'm not a lender, just speaking from experience on the deals I've brokered so far. 

    0Reply
  • Ryan Dunn
    OP
    Investor · Gilbert, AZ · Member since 2016 · 42 posts · 25 votes
    2y

    I did get a qute the other day at 6.89% but the fees i thought were high. 2 points and $2k fee for the loan. So $4k in fees. But its also my first DSCR loan. Maybe i am getting a good deal?

    0Reply
  • Zach Edelman
    Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes
    2y

    Definitely noticing rate drops. Rates in the high's to mid 7's. Depends on LTV, FICO, DSCR, and prepayment penalty, however.

    0Reply
  • Jeff ChisumPro Member
    Lender · All 50 States · Member since 2020 · 248 posts · 142 votes
    2y

    20% down

    720 credit

    1:1 ratio

    7.875% no points

    $1800 lender fees

    3 year PPP in states where allowed but we can originate in all 50 states

    Fully delegated.  We control of the entire process; processing, underwriting, closing, funding

    Worked with same investor for three years.  We know up front what can and can’t be done.  Can use AirDnA for short term rentals 

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @Ryan Dunn:

    Have you guys noticed the rate drops on the DSCR loan side? Or do they keep them higher now thats the 30 year conventional is dropping.


     Hey Ryan, 

    Depending on LTV, Loan Amount, Credit and Experience, you can an expect rates from 5.85%-8.9% Subject to points, fees, etc..

    $4k in fees is not bad for this loan assuming this is a $100k loan amount. Fees are generally higher on small loans, but that seems pretty fair 

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    3Reply
  • Salvador Auciello
    Lender · Irvine CA · Member since 2019 · 71 posts · 22 votes
    2y

    I have seen DSCR rates as low as 6.5% with discount points and actually a credit to borrower for a solid credit and low LTV in NY. However depending on variable factors as DSCR ratio, LTV, FICO, loan amount, Prepayment penalty or not it can range from 6's to high 8's.

    Including for unique cases for Foreign National loans.  

    1Reply
  • Jesson George
    Member since 2023 · 9 posts · 3 votes
    2y
    Quote from @Salvador Auciello:

    I have seen DSCR rates as low as 6.5% with discount points and actually a credit to borrower for a solid credit and low LTV in NY. However depending on variable factors as DSCR ratio, LTV, FICO, loan amount, Prepayment penalty or not it can range from 6's to high 8's.

    Including for unique cases for Foreign National loans.  


     which lender? I just got 7.125 w 0 points and ~3k in total fees

    1Reply
  • Andrew Zamboroski
    Lender · Member since 2021 · 495 posts · 130 votes
    2y
    Quote from @Ryan Dunn:

    Have you guys noticed the rate drops on the DSCR loan side? Or do they keep them higher now thats the 30 year conventional is dropping.

    Drops have pricing from 6’s+. Things like credit, DSCR, ltv, and prepayment penalty will affect rate ranges 
    0Reply
  • Jesse Holsapple
    Lender · Fountain, CO · Member since 2022 · 124 posts · 32 votes
    2y

    1-4 units the floor rate I have recently is 6.5% for 30 year fixed residential. 
    good credit, ratios, etc factor in but par is landing around 7.25%-7.5% without buying it down.

    0Reply
  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    2y
    Quote from @Ryan Dunn:

    I did get a qute the other day at 6.89% but the fees i thought were high. 2 points and $2k fee for the loan. So $4k in fees. But its also my first DSCR loan. Maybe i am getting a good deal?


     That's not high.

    1Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    2y
    Quote from @Ryan Dunn:

    Have you guys noticed the rate drops on the DSCR loan side? Or do they keep them higher now thats the 30 year conventional is dropping.


     Theres certainty always a lag when it comes to rates and closed loans and what is getting quoted in the current day but can share from our perspective:

    Average Rate so far in September 2024 - 7.417%

    Average Rate in August 2024 (103 DSCR Loans0 - 7.773%

    I'd predict average rate will continue to drop and be close to 7% flat for September once the month concludes

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    1Reply
  • Bryan MaddexBusiness Member
    Lender · Charlotte, NC · Member since 2015 · 159 posts · 76 votes
    2y

    With 70% loan to value you can be in the low 7s with no points currently, 60% loan to value you can be in the high 5s with as little as 2 points currently. Many DSCR options are cheaper on the rate side than Conventional investment loans are, and often times lower points than conventional with higher loan to values (80 and 85% options). You just have prepayment penalties (PPP) on the DSCR side vs no PPPs on conventional loans.

    The smaller the loan size, the more you should consider paying a few points at closing so you are not looking to do another refi any time soon. Pay for your next refi with this current loan and take the longer PPP so you get better rates.  The higher the mortgage balance (could be anywhere from $200-$300k+) you could consider taking slightly higher rates for the shorter PPP as refinancing in the future could make more sense than paying down points now with longer PPPs. 

    No right answers!  Questions to ask yourself:
    Will I see rates drop enough in the next 2 to 3 years to consider another refi in the future?
    Will equity appreciation be great and will I want to do a cash out refi in the future?
    How long do I intend to hold this property?
    Am I thinking of converting this property for SRO/PadSplit model where refinancing may be harder to do because of property improvements I have made?

    Speaking to a lender that helps you think about future plans and thinking about when/if you may do another refi should help you determine if you should pay points on this refi or not.  If you will be doing another refi (to pull out future equity or because you feel rates will get low enough to justify this), you probably want to go with a No Points option.

    Not all DSCR lenders offer no point options! Work with a broker who has access to a large variety is going to help you find an appropriate option for your situation vs a direct lender who can only sell you their limited product set. #brokersarebetter ;)

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    0Reply
  • Jesse Holsapple
    Lender · Fountain, CO · Member since 2022 · 124 posts · 32 votes
    2y

    Just saw 6.5% 30 year fixed 1-4 unit rental loan.

    0Reply
  • Carrie Matuga
    Lender · Riverside, CA · Member since 2017 · 248 posts · 98 votes
    2y

    Right now mid 6s to low 7s.

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

    you can get down into the 6's these days 

    0Reply
  • Ryan Dunn
    OP
    Investor · Gilbert, AZ · Member since 2016 · 42 posts · 25 votes
    2y
    Quote from @Stephanie P.:
    Quote from @Ryan Dunn:

    I did get a qute the other day at 6.89% but the fees i thought were high. 2 points and $2k fee for the loan. So $4k in fees. But its also my first DSCR loan. Maybe i am getting a good deal?


     That's not high.


     Ok good to know. Thanks

    0Reply
  • Ryan Dunn
    OP
    Investor · Gilbert, AZ · Member since 2016 · 42 posts · 25 votes
    2y
    Quote from @Jesse Holsapple:

    Just saw 6.5% 30 year fixed 1-4 unit rental loan.


     Thats sounds great

    0Reply
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