How to Compare DSCR Loan Offers in 2026

We review other lenders’ term sheets for investors constantly, and we shop our own deals across a wholesale panel before we borrow a dollar. Here is the framework we actually use.

The Seven Numbers That Decide It

1. Rate — but only after you confirm the quotes assume the same leverage, prepay, and DSCR. An unmatched rate comparison is meaningless.
2. Points and fees — origination, underwriting, processing. Total them; a lower rate bought with extra points has a breakeven date, and your hold period decides if you ever reach it.
3. Leverage — the down payment difference between two offers is often worth more than the rate difference, especially if you are redeploying capital into the next deal.
4. How the DSCR is calculated — interest-only versus amortizing payment, how taxes and insurance are estimated, and how STR income is treated can flip the same property from qualifying to not.
5. Prepayment penalty structure — the step-down schedule and how many years it runs.
6. Reserve requirements — months of payments you must hold after closing; this changes your real cash-to-close.
7. Closing timeline and certainty — a slightly better price from a lender that retrades or misses dates is not a better offer.

The Prepayment Penalty Trap — In Both Directions

“No prepay” offers sound strictly better. They are not — they are priced in. If you will hold the property five-plus years, accepting a standard step-down prepay in exchange for better pricing usually wins. If you are running BRRRR and plan to refinance within a year or two, the no-prepay or short-prepay option earns its premium many times over. The right answer is your exit timeline, not the label.

BRRRR Borrowers: Ask These Before You Sign

• What is the prepay if I refinance in months 6–18?
• Does the payoff treat a refinance differently than a sale?
• What are your seasoning rules if I come back for a cash-out at the new value?

Broker vs. Bank vs. Direct Lender

A bank offers its box, a direct lender offers its box, and both boxes fit some deals well. A broker built for investors — that is us — shops your file across many wholesale lenders and matches the structure to your actual plan. We are compensated transparently, and it shows up on your closing statement, not hidden in the story. The practical difference: one application, the whole panel’s answers.

The Quote-Review Checklist

• Same leverage, same prepay, same DSCR assumptions on every quote — or normalize them first
• Total cost = rate + all points/fees over your expected hold, not the teaser number
• Prepay structure matched to your exit timeline
• Reserves and cash-to-close compared, not just the payment
• Lender reputation for closing on time at the quoted terms

Frequently Asked Questions