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 An overview of the loan process
Make no mistake, there's a lot involved in getting a Commercial mortgage loan. You wouldn't be here on our website if you could fill out a one-page application and get the best loan for you funded the same day. What we do is most of the heavy lifting for you, so you can concentrate on what's important -- preparing to move into your new commercial property, saving money, or making plans for your commercial property investment.
There are four main steps involved in getting a loan. You'll see that we've made your part in them as easy as possible, and we do all the work! That's what we're here for.
| Step one: determine how much you can borrow |
In this step we ask you for a lot of information, including color digital photos of the property are seeking to finance so, we can determine the best course of action to secure the financing for your loan request. In this step it is not uncommon to be required to pay up-front fees necessary to review, process and prepare the loan application package for underwriting. Be prepare to write a check for amounts from $1200 to $5000. In most cases a portion of these funds are refundable if an approval can not be obtained.
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| Step two: The LOI or CL |
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In residential lending this is called Pre-Approval. In the commercial world this called obtaining the LOI or Letter of Intent. In other cases this is the CL or Commitment Letter. This is the document that will be the offer for Rate and Terms plus conditions to get your loan to the finish line. At this point the fees or deposits to cover underwriting/appraisal/due diligence/credit review become due and payable with the signing of the LOI or CL as an acceptance of the terms.
In other words, the rubber meets the road here!
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| Step three: Appraisal and Reports |
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In commercial lending the appraisal takes the longest (up to 6 weeks) and the costs here are nothing like a residential appraisal (about $400 and up to 20 pages) because of the amount of work that is required. Commercial appraisals cost from $1500 to $4500 (or More) and have up to 75 to 200 pages of information in the report.
Also, depending upon the property use and type, certain environmental reports may be required. For Example a Phase I and/or II for businesses that use chemicals or petrochemicals. (Dry cleaners, Gas Stations, Automotive Repair, etc.)
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| Step four: your loan is funded |
After all of the documents come together and are signed off, loan documents are prepared and a funding date is arranged.
| Of course, in an ideal world these steps move quickly and efficiently. Be prepared for the process to last 45-60 days and in some cases much longer. We're in the business of mortgage loans -- so we do most of the work. Doesn't that make sense?
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