Totally agree about the “creative” term sheets from local lenders—sometimes it feels like you need a decoder ring just to figure out what you’re actually signing up for. I’ve had a couple of those “hidden fee” moments myself, and it’s never fun. The flexibility is nice, but man, you really have to read between the lines.
I’ve noticed nationals are getting a bit faster with the standard stuff, but as soon as you mention anything that’s not a plain vanilla rental, it’s like you’re speaking another language. I tried to get a DSCR loan on a triplex with a small attached office last year, and the process just dragged. Ended up going with a local credit union who actually understood the property and didn’t treat it like some alien concept.
One thing I’d add—sometimes those local lenders will work with you on closing costs or even waive certain fees if you ask. Nationals? Not so much. But yeah, no matter who you go with, reading every single page of the docs is a must... learned that one the hard way too.
Yeah, I totally get the “decoder ring” comment.
Had a local lender sneak in a “processing fee” that was basically just extra profit for them. Curious—has anyone ever had a national lender actually budge on their terms? Or is that just wishful thinking?sometimes it feels like you need a decoder ring just to figure out what you’re actually signing up for
I’ve actually tried negotiating with a couple of the big-name lenders, and honestly, it felt like talking to a brick wall. They just point to their “standard terms” and that’s that. Local lenders at least pretend to have some wiggle room, even if they sneak in those weird fees. Has anyone ever managed to get a national lender to drop or adjust their DSCR requirements? Or is that just not a thing? I always wonder if it’s worth pushing back or if I’m just wasting my time.
Yeah, I’ve run into that same brick wall with the big guys. Last time I refinanced, I tried to get them to budge on the DSCR and it was a hard no—felt like I was negotiating with a robot. Local lenders at least act like they’re listening, even if you end up paying for it in some weird “processing” fee later. I guess with the nationals, their hands are tied by corporate or something. I’ve just learned to focus on the other terms instead, like prepayment penalties or closing costs, since DSCR seems set in stone.
Local lenders at least act like they’re listening, even if you end up paying for it in some weird “processing” fee later.
I know what you mean about the nationals feeling robotic. Last time I tried to negotiate with one of the big banks, I swear I could’ve been talking to a wall and gotten the same response. DSCR was non-negotiable, period. Like you said, it’s probably just corporate policy, but it’s still frustrating.
Local lenders do seem a bit more flexible, but yeah, they’ll sneak in those “processing” or “documentation” fees that pop up out of nowhere. I had one local guy who acted like he was doing me a huge favor by lowering the DSCR requirement, but then the closing costs were way higher than I expected. Kind of a trade-off.
I’ve started paying more attention to the fine print on things like prepayment penalties too. Sometimes you can save more there than you’d ever get by haggling over DSCR anyway. It’s all a bit of a shell game, honestly. At this point, I just try to pick my battles and not get too hung up on the stuff that’s set in stone.