At Visio Lending, we pride ourselves on our transparency and dependability. We are very transparent about how our rates are calculated, and our pricing is set, so you always know your rate. Our rates are essentially determined by three factors: credit score, Debt-Service Coverage Ratio (DSCR), and Loan-to-Value (LTV). Let’s dive into each factor and how they contribute to our rate calculation.
We use a tri-merged credit report and either use the middle of three scores, or the lower score of two scores. Our minimum credit score is 680, and our best rates are set for credit scores that are 740 and above.
For ample tips on improving your credit score to help you obtain the best interest rates, check out our Credit Score Page.
Debt-Service Coverage Ratio (DSCR)
Instead of looking at personal income to determine a borrower’s ability to pay their mortgage, Visio looks at the cash flow of the property. DSCR is calculated by dividing the monthly rent by the monthly principal, interest, property taxes, insurance and association dues, if any (PITIA). The higher your DSCR, the better your interest rate, since the more cash flow the property generates.
Loan-to-value is the ratio of a loan the value of a property purchased. At Visio Lending, our maximum LTV is 70% for cash-out refinances and 80% for purchases and rate & term refinances. However, the lower your LTV, the better your interest rate.
Editor's Note: This post was originally published in August 2019 and has been updated in November 2020 for freshness and accuracy.