DSCR Loan Fees - More than expected... is this normal?

[Ian Bower]

Hi All. First post. First investment property. 

Just getting my financial house in order and talking to some lenders. 

Most of them are quoting me: 
An origination fee - $2500

A processing fee - $1000

An Underwriting fee - $1000

Some misc. fee ("Admin") - $500

The numbers change, but ultimately the bottom line is just for the loan, it's $4700-$5500 in fees. 

Is this normal for this type of loan? I assume so since that's what everyone is quoting me. 

I appreciate the help. 

[Jay Hurst]

Quote from @Ian Bower:

Quote from @Jay Hurst:

Quote from @Ian Bower:

Hi All. First post. First investment property. 

Just getting my financial house in order and talking to some lenders. 

Most of them are quoting me: 
An origination fee - $2500

A processing fee - $1000

An Underwriting fee - $1000

Some misc. fee ("Admin") - $500

The numbers change, but ultimately the bottom line is just for the loan, it's $4700-$5500 in fees. 

Is this normal for this type of loan? I assume so since that's what everyone is quoting me. 

I appreciate the help. 

My first question is always: Why a DSCR loan? They are more expensive so great if you have to have it, not good if you can do something else.

 Hey Jay - I too am asking why :D 

My only experience has been with conventional mortgages - I recently purchased my own home with one and since I am a small business owner it was like pulling teeth. 

The DSCR loans seem much easier to qualify for, but perhaps there are other loan types out there that are less expensive and also aren't a root canal? (the way the conventional mortgage was a root canal)

I am probably going to pay cash for the property upfront and then finance it after the close, so I have some time to explore financing products. 

 The pain of the root canal depends on the dentist. Same as the experience for the self employed borrower. I am assuming it was a root canal like experience because of the drib and drabs of documentation that that the LO asked for?  LO's who are not experienced in general or maybe who just do not work with self employed very often can make the experience much worse then it needs to be. Generally, only 1 or 2 years of  business and personal tax returns (depends on how long your business has been around) should be the only additional docs needed for most self employed vs W-2 wage earners.

and the items mentioned above are not relevant for a qualified borrowers (and some are down right incorrect). I have been doing DSCR loans for 10-12 years back when they were called cash flow loans, so when they fit they are a great product (even without the nonsense unlicensed DSCR only brokers say about them like the not on credit report BS) but they are NOT as good as a conventional if one qualifies.