DSCR Loan Question for Property in Montana

[Jennifer Marcucci]

Hello! I tried to find some helpful information in the forums but I wanted to ask specifically this question. We are looking at a duplex in Montana. I started researching DSCR loan options because my husband is retiring soon so it will get a little tricky with W2 income, and I was also wondering if we could get a lower rate than a conventional loan as well because because the deals where we are looking are hard to cash flow at the current rates. I reached out to Prime Lending as we have worked with them in the past with the conventional loan, Visio Lending, and Lending One. We have about a 1.1 ratio, so it meets that requirement at least. Visio came back with the best rate, but this will be our first DSCR loan. I know Visio Lending has a 5 year pre-payment penalty, but we will be holding this property. Has anyone worked with Visio Lending or Lending One? Were you happy with your experience as far as DSCR loans go? We would love any feedback you have as a first time DSCR applicant! Thank you!

[Jay Hurst]

Quote from @Jennifer Marcucci:

Hello! I tried to find some helpful information in the forums but I wanted to ask specifically this question. We are looking at a duplex in Montana. I started researching DSCR loan options because my husband is retiring soon so it will get a little tricky with W2 income, and I was also wondering if we could get a lower rate than a conventional loan as well because because the deals where we are looking are hard to cash flow at the current rates. I reached out to Prime Lending as we have worked with them in the past with the conventional loan, Visio Lending, and Lending One. We have about a 1.1 ratio, so it meets that requirement at least. Visio came back with the best rate, but this will be our first DSCR loan. I know Visio Lending has a 5 year pre-payment penalty, but we will be holding this property. Has anyone worked with Visio Lending or Lending One? Were you happy with your experience as far as DSCR loans go? We would love any feedback you have as a first time DSCR applicant! Thank you!

Understand that the pre-payment penalty does not only kick in if you sell the property but also if you refiance. That can be potentially expenseive if rates do drop on the next few years. There are DSCR options with no or much lower then 5 yr pre-payment penalties.

You should also understand the upfront costs to get a rate. You can more or less get any rate you would like, just depends on how much you pay for the rate. The lowest rate offered is almost always NOT the best execution rate.  Execution rate means the best balance between rate, upfront costs and PPP.