Good points here, and I get what you're saying about bigger banks sometimes being clearer. I've had mixed experiences myself—smaller lenders can be great IF they know DSCR loans inside-out. But if they're not familiar, it can turn into a mess real quick. My advice: ask upfront how many DSCR deals they've actually closed recently...saves you from becoming their guinea pig, lol.
Yeah, that's solid advice. I've noticed that too—smaller lenders can be awesome when they're dialed in, but if they're winging it...yikes. Also worth mentioning is to double-check their underwriting timelines. Had a friend whose lender promised quick turnaround, then dragged their feet for weeks because they weren't familiar with DSCR nuances. Asking about recent closings upfront is smart; I'd even push a bit and ask about typical processing times. Better safe than stuck waiting around forever...
"Had a friend whose lender promised quick turnaround, then dragged their feet for weeks because they weren't familiar with DSCR nuances."
Yeah, seen that happen too often... lenders overpromising because they underestimate the DSCR details. A couple things I'd add:
- Ask specifically if their underwriting team handles DSCR loans regularly or just occasionally. Big difference.
- Clarify upfront about any extra docs they'll want—some lenders suddenly request additional paperwork mid-process, causing delays.
- Don't be shy about asking how they handle borderline DSCR ratios. Can they offer exceptions or are they rigid about it?
Better to poke around a bit early than get blindsided later.
Yeah, totally agree with checking if their underwriting team actually knows DSCR loans. Had a client once whose lender swore up and down they were "DSCR pros," then halfway through asked for rental comps out of nowhere... cue the panic. Also, watch out for lenders who advertise super-low DSCR thresholds—they might technically offer them but usually slap on higher rates or fees. Better to get that info upfront than find out at closing time.
That's a good point about lenders advertising low DSCR thresholds—I've seen that happen more than once. It makes me wonder, though, if there's a reliable way to vet these lenders upfront beyond just asking them directly. Maybe requesting references from past borrowers who've closed similar loans could help? I've had clients who did that and it saved them from some headaches down the line.
Also, regarding the rental comps surprise, I've noticed some lenders seem to have internal guidelines that aren't always clear upfront. It might be helpful to ask specifically about their underwriting checklist or criteria early on. That way, you can spot any red flags or unexpected requirements before you're knee-deep in the process. Curious if anyone's tried this approach and found it effective...