Pricing
What actually sets your rate.
There is no one DSCR rate. Your pricing is assembled from six things, and you can influence most of them before you apply.
The six drivers
Ranked by how much they usually move pricing.
The bars are directional, not a quote. They show which levers tend to carry the most weight on a typical file.
Credit score
Higher is betterThe single largest lever on most programs. Pricing usually improves in tiers, so moving from 679 to 680 can matter more than moving from 700 to 719.
Pay card balances down before you apply and avoid opening new credit lines.
Loan-to-value
Lower is betterA smaller loan against the same property is a safer loan. Pricing generally improves each time you step down a leverage band.
If you are close to a band, a slightly larger down payment can pay for itself.
Coverage ratio
Higher is betterA property at 1.30 prices better than the same property at 1.01. Lenders read the cushion as resilience.
Raise rent, lower the loan, or shop insurance to move the ratio before you lock.
Prepayment structure
A trade-offAccepting a longer prepayment penalty usually buys a lower rate. A shorter one costs more up front in rate.
Match the structure to your hold period rather than to the headline rate.
Property type
Lower is betterA leased single family rental is the baseline. Condos, 5 to 8 unit buildings, short-term rentals, and vacant properties each carry their own adjustment.
Ask how your property type prices before you assume the baseline rate applies.
Occupancy at closing
Lower is betterA signed lease in the file is stronger than a market rent estimate. Vacant properties can price higher or cap your leverage.
Where you can, lease the property before the appraisal.
Rate versus cost
The lowest rate is not always the cheapest loan.
Two loans can carry the same rate and cost very different amounts over the time you actually hold the property. Compare the whole package.
Read about closing costs and penalties| Compare | Why it matters |
|---|---|
| Rate | Sets the interest portion of every payment |
| Points and lender fees | Paid once, at closing, and often negotiable |
| Prepayment penalty length | Decides what an early sale or refinance costs |
| Interest-only option | Raises cash flow now, no principal paid down |
| Reserve requirement | Changes the cash you need, not the payment |
| Rate lock length | Protects you if the closing slips |
Questions
Pricing questions, answered plainly.
Because there is no single rate. Pricing is built from your credit score, leverage, coverage ratio, property type, prepayment structure, and current market conditions. A published number would be wrong for almost everyone who read it.
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