Dscr 100 k turn key sfh rental home how much cash to close
6 Replies
- Lender · Long Beach, CA · Member since 2019 · 67 posts · 15 votes2d
Lender here- even with a strong DSCR the sub 720 fico might affect the overall leverage. 20% down is more realistic.
With that being said you're probably looking at 20-25% DP and most lenders will require that you have 3-6 months of interest reserves post closing.
You would need to account for cost of appraisal, lender fees (legal, processing, etc) , escrow, title insurance, taxes , and property insurance.
In terms of cash on hand a safe number to show would be about 30-35% of that Purchase Price.
- Lender · Philadelphia, PA · Member since 2024 · 16 posts · 4 votes2d
Hi Gp — good news first: for a true DSCR loan your personal debt-to-income ratio is generally not what the lender underwrites — they size the loan off the property's rent versus the full payment (principal, interest, taxes, and insurance), usually looking for about a 1.20-1.25 ratio or better. On a $100K turnkey rental, a realistic cash-to-close plan is 20-25% down ($20-25K) plus closing costs, points, prepaid taxes/insurance, and several months of reserves — 15% down programs exist, but as you flagged, the rate and points usually get steep enough that the numbers stop penciling. Paying down credit cards can still help indirectly by lifting your score and freeing up reserves, but I would not drain the down-payment cash to do it. I am Marc with Royal Partners — if you want, DM me the expected rent and taxes/insurance on the place you are looking at and I will give you straight numbers on what cash-to-close would actually look like.
- Lender · Dallas, TX · Member since 2024 · 10 posts · 4 votes2d
GP, DTI doesn't matter on a DSCR loan. It's sized on the house, rent vs the full payment.
The number that matters is your 681. On the programs I work with, 680 to 699 gets you 75% on a purchase. Drop under 680 and it’s 65%. Hit 720 and it’s 80%. So don’t drain your down payment on the cards, but paying them down is the cheapest way to move your score. And don’t open anything new before closing.
Rough cash to close on a $100K house at 75%:
$25,000 down
$1,500 origination (2 points on a $75K loan)
$600 appraisal
About $1,600 in other closing costs
A few months of taxes and insurance into escrow
3 to 6 months of payments in the bank as reserves after closing
Call it $29K plus escrow and reserves.
You’re right on the 15% down programs. If it only works with expensive leverage, it doesn’t work. There is also programs with lower credit thresholds that cost more as well.
I run a lender, so weigh that.
- 1dRobin SimonBusiness MemberLender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
Not really, DTI isnt relevant for a DSCR loan - its underwritten primarily based on the property (the rent vs the PITIA) rather than personal income or tax returns, so your 50%+ DTI wont come into play. What DOES matter is credit score and reserves, and 681 is fine with plenty of DSCR Lenders but you'd likely see better pricing at 700+ (a lot of lenders price in 20 point buckets, 680/700/720 etc), so paying down the cards to drop utilization could be worth it if it bumps you over 700 before you lock.
On a $100k purchase at 25% down rough numbers would be $25k down plus something like $5-7k in closing costs (points, lender fees, appraisal, title, prepaid taxes/insurance) plus reserves, which is generally 3-6 months of PITIA depending on the lender, so ballpark $33-37k all in. 20% down is pretty common too and yeah theres 15% down options out there but you're right that the pricing gets heavier the higher you go on leverage. One thing I would say is watch the loan amount, a lot of DSCR Lenders have minimums around $75k-$100k and small loans tend to price worse, and since you mentioned "declining market" some lenders also knock 5% off the max LTV if the appraisal checks "Declining" so 15-20% down might not even be on the table in that case.
Whats the rent looking like on the one you're eyeing?
Harpoon Capital514 Reviews - Lender · Member since 2026 · 2 posts · 0 votes1d
Good questions. Rough math on a $100K turnkey:
Down payment: 20 to 25% is typical, so $20K to $25K. The 15% down options exist but you'll pay for it in rate and points.
Closing costs: figure 3 to 5%, so $3K to $5K for points, title, appraisal and lender fees.
Reserves: most DSCR lenders want 3 to 6 months of payments sitting in your account after closing.
So plan on roughly $28K to $35K all in.
DTI doesn't matter on a DSCR loan since it's underwritten on the rent covering the payment, not your income. Credit does matter though. At 681 you qualify, but getting over 700 usually improves your pricing. If your cards are carrying high balances, paying them down can bump your score fast. Just don't drain the cash you need for down payment and reserves.
One more thing: a lot of DSCR lenders have minimum loan sizes around $75K to $100K, so on a $100K purchase you'll have fewer options. Ask about that upfront before you pay for an appraisal.
- Investor · Member since 2023 · 127 posts · 63 votes1d
@Gp G Here's a rough build for a $100K purchase so you can see the whole number. At 20-25% down that's $20-25K. DSCR closing costs often land around 3-5% of the loan once you add points, origination, appraisal and title, so about $2,500-4,000 on a $75-80K loan. Prepaid taxes and insurance for escrow might be another $1,500-2,500, and many lenders want 3-6 months of payments in reserves, roughly $3-5K. All in, plan on $27-36K.
On the cards: DTI usually isn't the issue with DSCR, but a 681 score often lands you in a worse pricing tier. Paying balances down can move a score quickly, and a better rate tier can be worth more than an extra 5% down. Ask your lender what score gets you the next tier.
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