Should I have my DSCR loan paperwork reviewed by a lawyer

Question

Hi,

I'm new to financing and we received a 100 page file for our final DSCR loan process to sign with a notary.

Should I review these with a lawyer to make sure we're not missing something we aren't aware of?

Erik Estrada · Answer

Be aware that these lenders will not change their specific loan requirements to get the deal done. So your best bet is to find another lender if you find specific items that you do not agree with

Chris Seveney · Answer

@Yael Fuerst

If this is your first DSCR I would say yes - even if it’s cookie cutter - it’s good to ask an attorney to review and understand what you are signing

Are their covenants, is it guaranteed, your attorney can review and explain all the what ifs which I highly recommend

Patrick Roberts · Answer

You can if you want, but if this loan is from a well known, licensed, reputable lender, then its similar to getting regular mortgage. The biggest difference with DSCRs is usually 1) prepayment penalties 2) more points 3) an affidavit that you cannot occupy the property 4) covenants and agreements regarding the requirements and rights of the lender to protect/preserve the collateral that may be more aggressive than Conventional. You should absolutely read everything, though.

If this is from some fly by night, off the radar place, then yeah, probably wouldnt hurt to get an outside opinion.

Timothy Hero · Answer

Always use a broker. That'll give a little more comfort and guidance. Second: review what you sign. Some lenders will sneak a "pledge of equity" into the deal.

Ko Kashiwagi · Answer

Hi Yael,

If you are willing to pay, no harm in getting it reviewed by a lawyer. It is pretty standard for loan documents to be 100's of pages, so you'll get the hang of it once you find a good/credible lender and gain experience. Definitely a good idea to check the lender/company's review!

Yael Fuerst · Answer

Thanks any chance you have someone you recommend ?

Erik Estrada · Answer

Unless its about the fees/rate of course

Erik Estrada · Answer

If you are not in any hurry to close, yes you should review it with your lawyer. The biggest pain points like others mentioned is the Pre-Payment Penalty, Lender protections, and undisclosed fees.

Should I have my DSCR loan paperwork reviewed by a lawyer

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