Urgent Advice Needed: Choosing the Best DSCR Loan Option Before Closing

[Emmanuel Ola]

Hello,

I am in the process of purchasing a property for $160k and plan to put 30% down with a DSCR loan over 30 years. My goal is to pay off the loan within 5 to 10 years.

I’ve spoken with a broker and received the following quotes. Which of these scenarios do you think is best, considering my intention to pay off the loan sooner?

Scenario 1:

• Rate: 9.375%
• Monthly Payment: $1,185.31
• Closing Cost: $12,768.53
  • Broker Fees: $2,417
  • Lender Fees: $2,170
  • Cost to Buy Rate Down: $0
  • Escrow Fees: $2,797.50
  • 1 Year Hazard Insurance: $1,044
  • Impound Account: $1,598.04
  • Appraisal Fee: $500
• Down Payment: $48,000 + $10,526.54 (30% down + closing costs)
• Total Cash to Close: $58,526.54

Scenario 2:

• Rate: 8.875%
• Monthly Payment: $1,144.87
• Closing Cost: $12,768.53
  • Broker Fees: $2,417
  • Lender Fees: $2,170
  • Cost to Buy Rate Down (1%): $1,120
  • Escrow Fees: $2,797.50
  • 1 Year Hazard Insurance: $1,044
  • Impound Account: $1,598.04
  • Appraisal Fee: $500
• Down Payment: $48,000 + $11,646.54 (30% down + closing costs)
• Total Cash to Close: $59,646.54

Scenario 3:

• Rate: 8.625%
• Monthly Payment: $1,124.87
• Closing Cost: $12,206.54
  • Broker Fees: $2,417
  • Lender Fees: $2,170
  • Cost to Buy Rate Down (1.5%): $1,680
  • Escrow Fees: $2,797.50
  • 1 Year Hazard Insurance: $1,044
  • Impound Account: $1,598.04
  • Appraisal Fee: $500
• Down Payment: $48,000 + $12,206.54 (30% down + closing costs)
• Total Cash to Close: $60,206.54

Scenario 4:

• Rate: 8.375%
• Monthly Payment: $1,105.03
• Closing Cost: $12,768.53
  • Broker Fees: $2,417
  • Lender Fees: $2,170
  • Cost to Buy Rate Down (2%): $2,240
  • Escrow Fees: $2,797.50
  • 1 Year Hazard Insurance: $1,044
  • Impound Account: $1,598.04
  • Appraisal Fee: $500
• Down Payment: $48,000 + $12,768.53 (30% down + closing costs)
• Total Cash to Close: $60,768.53

Which of these options do you think is most suitable, given that I plan to pay off the loan sooner rather than later?

Thanks!