What are typical DSCR loan closing costs?
Total closing costs typically 3-5% of loan amount. Origination 1.5-2.5 points + title, appraisal, recording, and prepaid items.
DSCR loan closing costs run higher than conventional. Total closing typically 3-5% of loan amount. Breakdown: (1) Origination fee - 1.5-2.5 points (1.5-2.5% of loan amount), the largest single line. (2) Title insurance - varies by state, $1500-4000 typical for $300K loan. (3) Lender title insurance - $500-1500. (4) Appraisal - $600-1200 for SFR, $1500-3000 for multi-unit or condotel. (5) Recording fees - $100-300, varies by county. (6) Attorney/closing fees - $500-1500. (7) Prepaid interest - partial month at the new note rate. (8) Property tax escrow setup - varies by month of close. (9) Insurance binder - first year homeowners or landlord policy. (10) Wire/courier - $50-200. Optional: rate buy-down points (each point reduces rate by ~0.125-0.250%, paid upfront). Compared to conventional investment loans where origination is typically 0.5-1.0 point, DSCR adds approximately 1.0-1.5% in upfront cost. For BRRRR investors doing multiple closings per year, this is meaningful - some investors use no-origination DSCR products that absorb origination into a higher rate.
People also ask
Are DSCR closing costs negotiable?
Origination fee: sometimes negotiable, especially on larger loans. Third-party fees (title, appraisal, recording): generally not negotiable, though title can be shopped.
Can I roll closing costs into the loan?
Cash-out refi: yes, can be netted from cash-out proceeds. Purchase: only if the LTV cap allows - typically you must pay closing in cash separate from down payment.
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