Investors: What's Your #1 DSCR Refinance Frustration?

Question

When you're refinancing with a DSCR loan, what's the single biggest factor that helps you decide which lender to go with?

DSCR borrowers: If a lender could solve one pain point for you when refinancing, what would it be?

For those who’ve refinanced with a DSCR loan recently:👉 What went well?👎What do you wish had gone better?

Chris Seveney · Answer

I think it also boils down to experience of who you are working with and how far down the food chain they are. We have seen deals where there were multiple brokers daisy chained and we just pass on those as the terms will never be that great because of all the fees involved.

WOrking with experienced people in any field is always best way to go, and not always the "cheapest"

Erik Estrada · Answer

I agree,

Yea you can totally tell when brokers try to act like they are a direct lender.... The easiest give away is when they charge excessive points and don't have straight answers when you call them.

Connor Hibbs · Answer

The most frustrating things that I've seen are poor appraisals, poor (or lack of) communication, and slow document collection.

POOR APPRAISALS: can ruin your deal. Whether it's the property value coming in way under what you anticipated, unexpected repairs that trigger "subject to" on the report, bad/no comps, or low market rents. Making sure that the property is in good condition and doing your own research (or having your agent look) for comps in both the home value and market rental value can help with expectations and save lots of time.

POOR COMMUNICATION: This is a 2-way street for the lender/broker and the borrower. If your lender waits to tell you that rates went before you could rate lock you'd be mad. If you're trying to rate lock a file and can't get a hold of the borrower, then suddenly rates go up, everyone is upset. Finding out that a property is rented by the room instead of a long-term lease can also impact your loan from LTV to interest rate. When issues pop up they should be addressed as soon as possible since the longer it's ignored the more painful it will be when it does inevitably need to be addressed.

SLOW DOCUMENT COLLECTION: This goes both ways with getting the docs to your lender and the lender reviewing them. On the lending side it can be very frustrating when someone gives a hard closing date then disappears a day after you create their file just to come back panicked about when they can close. On the flip side it would be extremely frustrating to send documents in just to find out that edits or corrections are needed days after you'd sent them in. To have the cleanest closing and most enjoyable process both parties need to send, collect, and review the documents in a timely manner.

Erik Estrada · Answer

On the broker side here are a few things that bother me ALOT working with direct and wholesale lenders:

1. Lack of Communication - Takes until the next business day to get a response on something very time sensitive. At least acknowledge and say, I have not gotten an update yet instead of ghosting.

2. Lack of Experience - Don't be the guy that says NO, without asking upper management or your underwriter. You will lose $ all the time

3. Outdated Portals - I absolutely hate uploading docs on a dinosaur website that uses encompass lol.

4. Very Slow at giving pricing - I know it is the end of the month, but time is money. At least get back to me at the end of the day.

5. Handle Appraisals, Title, Insurance and Third party Internally - I hate this with a passion. I do not like to follow bank-like procedures and this is why I prefer to work with wholesale lenders. Having control over these items is a must for me.

Jaycee Greene · Answer

@Ashlee Fake @Carrie Matuga Make sure to add in the advertising that the DSCR loan can be "Up to" a certain LTV % without mention of the maximum DSCR that is required that will ultimately limit the actual LTV that can be used.

Brian Teeter · Answer

I am an investor myself and also work with BRRR buyers in Little Rock, Arkansas.  In both cases, I have had great success with Aaron Chapman https://crosscountrymortgage.com/mesa-az-3938/aaron-chapman/

I have been working with him for years and he is an excellent resource. Works with borrowers nationwide

Jaycee Greene · Answer

Hi @Ashlee Fake, welcome to the BP Forum! As a real estate agent, what frustrations are your clients experiencing with DSCR refinance loans?

Investors: What's Your #1 DSCR Refinance Frustration?

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