INVESTOR GUIDE · BROKER VS DIRECT LENDER
DSCR broker vs. direct lender
What a broker gets you. A direct lender has one credit box and one set of programs. A broker takes your deal to the lender it actually fits.
The short answer
- A direct lender tries to fit you into its own programs. If you don’t fit, you start over somewhere else.
- A broker shops hundreds of lenders and products with one credit pull, good for 120 days.
- If a loan gets declined, your credit and appraisal can go to another lender instead of starting from scratch.
THE DIRECT LENDER PROBLEM
One lender means one box
Go straight to a lender and you get one credit bucket and one set of loan programs they’re trying to fit you into. If your deal doesn’t fit, the answer is no, and you’re back to shopping. Every new lender wants its own credit pull, because one bank won’t take another bank’s.
BEFORE YOU SHOP
Does shopping for a DSCR loan hurt your credit?
Each new hard inquiry can lower your credit score, so if you let every lender pull your credit while you shop, you can literally shop yourself into worse terms. Never let anyone pull your credit until you know you’re going with them.
If you are going to shop, give every lender the same information, the same credit score, value and rents, so you’re comparing apples to apples.
ONE PULL, MANY LENDERS
One credit pull, good for 120 days
As a broker, we look at hundreds of lenders and hundreds of products. If your deal doesn’t fit one bank, we take it to another. We pull your credit once, it’s good for 120 days, and we can take it to any lender we’re approved with. That saves you from a string of hard inquiries from bouncing bank to bank. Many of our lenders also offer price matching.
A PLAN B BUILT IN
Your appraisal can move with you
If a loan gets declined for whatever reason, we don’t start over. We take your credit and your appraisal to a different lender and keep moving.
An appraisal can move between lenders as long as it was ordered through an appraisal management company (AMC), not directly by a lender. If another broker ordered it, they have to release the report to us along with the documents needed for the transfer: the appraisal transfer letter, the XML file and the invoice.
WHY IT RARELY COMES TO THAT
A 97% pull-through rate
Our pull-through rate is 97%. When we submit a loan to a lender, we already know it’s going to qualify, because we’ve vetted that lender’s guidelines against your deal before we send it. That’s the difference between a broker who places deals and one who just submits them.
STRAIGHT ANSWERS
DSCR broker questions
Will a broker pull my credit more than once?
No. We pull your credit once, it’s good for 120 days, and we can use it with any lender we’re approved with.
What happens if my DSCR loan gets declined?
We take your credit and your appraisal to another lender instead of starting over, as long as the appraisal was ordered through an appraisal management company. With a 97% pull-through rate, it rarely comes to that.
Why use a DSCR broker instead of going direct?
A direct lender can only offer its own programs. A broker matches your deal to the lender whose guidelines it actually fits, across hundreds of lenders and products.
Does shopping DSCR lenders hurt my credit?
It can. Each new hard inquiry can lower your score. Don’t let anyone pull your credit until you know you’re going with them, and give every lender the same credit score, value and rents so you can compare apples to apples.
KEEP READING
DSCR KINGS · INVESTOR FINANCING
Get your deal matched to the right lender
Send us the property and your goals. We’ll tell you which lender it fits before anything gets submitted.
Business-purpose loans for investment properties only; not for owner-occupied homes. Lending guidelines, leverage and loan programs vary by lender and by state and are subject to change. Terms and approval depend on the property, the borrower’s credit and capital-partner guidelines and are not guaranteed. Examples are for illustration only.
