DSCR Loan Closing Costs: What Investors Need to Budget
DSCR loan closing costs differ from conventional mortgages in a few important ways. Here's exactly what you'll pay — and what to look out for in the loan estimate.
What Makes DSCR Closing Costs Different?
DSCR loans carry similar closing cost categories to conventional mortgages, but a few line items are notably different. Understanding the full cost picture before you sign a purchase contract ensures you've accounted for every dollar needed at the closing table.
Typical DSCR Loan Closing Cost Components
Origination Fees (1.0–2.5% of loan amount)
This is the lender's primary fee. DSCR lenders typically charge 1.0-2.0 origination points. On a $350,000 loan, that's $3,500–$7,000. Some lenders offer "no-point" options at a higher interest rate — worth comparing if you plan a shorter hold.
Appraisal ($600–,200+)
DSCR lenders require a standard FIRREA-compliant appraisal. For residential 1-4 unit properties, this runs $600-$900. Unique or luxury properties may require
,000-,500+. Importantly, the appraiser will also complete a rent schedule (Form 1007) to determine market rent — this is the figure used in the DSCR calculation if the property is vacant.
Title Insurance and Settlement (,200–,500)
Title insurance protects the lender against ownership disputes. You'll pay for a lender's title policy at minimum; an owner's title policy is also recommended. Settlement/closing agent fees round this out to
,200-,500 in most markets.
Recording and Government Fees (
00–$600)
County recording fees, transfer taxes (in applicable states), and documentary stamp taxes vary by location. High-transfer-tax states like New York and Florida can make this line item significantly higher.
Prepaid Items (1–3 months of expenses)
You'll typically pre-fund 2-3 months of property tax escrow, 12-14 months of homeowner's insurance (paid upfront), and daily interest from closing date to first payment date. Budget $3,000-$6,000 for these items on a $300K-$400K purchase.
Lender Processing and Underwriting Fees ($500–,500)
Most DSCR lenders charge processing, underwriting, and administrative fees. These are separate from origination points and often appear as flat fees.
Sample Closing Cost Estimate: $350,000 DSCR Loan Purchase
- Origination (1.5 points): $5,250
- Appraisal + rent schedule: $850
- Title insurance + settlement:
,100
Recording / government fees: $350
Lender processing/underwriting: $995
Prepaid taxes (3 months): ,800
Prepaid insurance (14 months): ,960
Prepaid interest (15 days): $875
Estimated Total: ~4,180
That's roughly 4% of the loan amount on top of your 20-25% down payment. Always request a Loan Estimate (LE) within 3 business days of application — it itemizes every fee.
Can You Roll Closing Costs Into the Loan?
Generally, no — you cannot add closing costs to your loan balance on a purchase. However, on a refinance (rate-and-term or cash-out), closing costs can often be rolled in, or the lender may offer a higher rate with a lender credit that offsets costs.
Tips for Minimizing DSCR Closing Costs
- Negotiate origination points — Points are negotiable. Ask if the rate is lower with 0 points vs 1.5 points and compare the total cost over your expected hold period.
- compare title companies — In states where you can choose your settlement agent, get multiple quotes.
- Close near the end of the month — This reduces prepaid daily interest (you owe interest from closing to first payment).
- Ask about rate buydowns — If rates are expected to drop, a shorter lock period may lower your cost.
Ready to Apply for a DSCR Loan?
Review property-cash-flow-focused purchase, refinance, and cash-out financing options.
For business-purpose loans on non-owner-occupied investment properties only.
Start Loan InquiryFor business-purpose loans on non-owner-occupied investment properties only.
DSCR lenders require a standard FIRREA-compliant appraisal. For residential 1-4 unit properties, this runs $600-$900. Unique or luxury properties may require
Title Insurance and Settlement (,200–,500)
Title insurance protects the lender against ownership disputes. You'll pay for a lender's title policy at minimum; an owner's title policy is also recommended. Settlement/closing agent fees round this out to
Recording and Government Fees (
County recording fees, transfer taxes (in applicable states), and documentary stamp taxes vary by location. High-transfer-tax states like New York and Florida can make this line item significantly higher.
Prepaid Items (1–3 months of expenses)
You'll typically pre-fund 2-3 months of property tax escrow, 12-14 months of homeowner's insurance (paid upfront), and daily interest from closing date to first payment date. Budget $3,000-$6,000 for these items on a $300K-$400K purchase.
Lender Processing and Underwriting Fees ($500–,500)
Most DSCR lenders charge processing, underwriting, and administrative fees. These are separate from origination points and often appear as flat fees.
Sample Closing Cost Estimate: $350,000 DSCR Loan Purchase
- Origination (1.5 points): $5,250
- Appraisal + rent schedule: $850
- Title insurance + settlement:
,100
Most DSCR lenders charge processing, underwriting, and administrative fees. These are separate from origination points and often appear as flat fees.
Sample Closing Cost Estimate: $350,000 DSCR Loan Purchase
- Origination (1.5 points): $5,250
- Appraisal + rent schedule: $850
- Title insurance + settlement:
That's roughly 4% of the loan amount on top of your 20-25% down payment. Always request a Loan Estimate (LE) within 3 business days of application — it itemizes every fee.
Can You Roll Closing Costs Into the Loan?
Generally, no — you cannot add closing costs to your loan balance on a purchase. However, on a refinance (rate-and-term or cash-out), closing costs can often be rolled in, or the lender may offer a higher rate with a lender credit that offsets costs.
Tips for Minimizing DSCR Closing Costs
- Negotiate origination points — Points are negotiable. Ask if the rate is lower with 0 points vs 1.5 points and compare the total cost over your expected hold period.
- compare title companies — In states where you can choose your settlement agent, get multiple quotes.
- Close near the end of the month — This reduces prepaid daily interest (you owe interest from closing to first payment).
- Ask about rate buydowns — If rates are expected to drop, a shorter lock period may lower your cost.
Ready to Apply for a DSCR Loan?
Review property-cash-flow-focused purchase, refinance, and cash-out financing options.
For business-purpose loans on non-owner-occupied investment properties only.
For business-purpose loans on non-owner-occupied investment properties only.