DSCR loans are cheaper than a traditional 30 year fixed right now.

[Rob Bergeron]

Adjust accordingly! 

[Erik Estrada]

They are technically more expensive than a traditional 30 year fixed. 

Let's compare two scenarios I priced out, Borrower Paid Broker Compensation

Purchase Price: $500,000

SFR

30 Year Fixed 

Credit 740 

DSCR over 1.00

Meets DTI Requirement

1. DSCR

No PPP

Rate: 8.75% 

PAR

30 Years Fixed 

2. Conventional, UWM 

Rate: 8.00%

Lender Credit: $620

30 Years Fixed 

You have to consider that a conventional loan does not have a Prepayment Penalty. The added Prepayment Penalty, makes the loan technically more expensive than a traditional conventional refinance if you decide to refinance in 1-5 years. 

BUT, 

If you do not plan on refinancing your loan in 1-5 years, then you could get better pricing on a DSCR loan.

Same scenario, with a 5,5,5,5,5 PPP structure 

Rate: 7.25% 

PAR

30 Years Fixed