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!

[Robin Simon]

Quote from @Jennifer Marcucci:

Visio Lending came in much lower (6%) - but that's why before we commit, I'd love to hear feedback if anyone has used them.  I asked Visio why it was so much lower, and they said the prepayment penalty is what helps to keep it down.  

 Visio tends to be limited in terms of prepayment penalty options with only a few options - others will have wider ranges of options including no prepay, 5/4/3/2/1, flat 5/5/5/5/5 which will lower your rate even further and then a "Cali Style" prepay option that most people don't know about but would be in your situation 3% for five years with the KEY bonus that you can pay down 20% of it each year with zero prepay (and then its really 2.4% instead of 3% because that 20% freely prepayable applies even if you totally prepay).

Rates have been going up and down and all over the place these last two weeks so I recommend continue to shop because quotes could be much lower even than a couple of days ago! (thanks mostly to the light inflation numbers that just came in this week)