Loan Process

How Can You Speed The Process?

There are a number of steps that can be quickly maneuvered, which will reduce the amount of time to close a real estate loan. The single most important item is information. Requested documentation or written responses to questions should be provided immediately. This promotes a quick processing review, and allows time to address questions regarding the information, written responses or to supply additional documentation.

Be sure to provide Full Disclosure of all relevant information related to the subject property or borrower. If you think something may be an issue, bring it up immediately with your Loan Officer. They will help determine the relevance of the issue as well as work to present mitigates to any adverse conditions. Lenders understand good. Lenders understand bad. Lenders don't understand surprises!

Expect more than one round of questions during the file review process. The goal of the pre-underwriting and loan processing is to gather all relevant information prior to submitting a loan file for final underwriting. New information often creates new questions or requests for supporting documents. The goal is combine final underwriting with a final approval.

Last, but certainly not least, is for you to do your own due diligence and be prepared. You should know the surrounding market, deferred maintenance and cost-to-cure, applicable laws or codes affecting the property, vacancy issues, have property photos, know who is party to the proposed loan, etc. Also, expect to spend several hours gathering documents such as tax returns, bank statements, leases, financial statements, etc.

Why Deals Go Sideways?

Garbage IN = Garbage OUT. Bad or incomplete information is the number one reason deals stall or don't close. Everyone wants to close, but if assumptions can not be supported, or information does not reconcile, the loan structure, pricing, or other terms are subject to change. This could make a deal less feasible, or result in a loan decline. Trying to explain bad data is an uncomfortable and frustrating process and will leave a bad taste in everyone's mouth.

Lack of due diligence on the borrower's part (mostly applicable to purchases) usually creates delays. It is important the borrower know the property intimately and be able to quickly and accurately address any underwriting questions. Inaccurate information will always cause delays.

Delays by the borrower (or their agents) with providing requested information may stall a deal in the underwriting process. Because your deal is not the only one, it will often get reprioritized due to lack of responsiveness.

Unrealistic expectations and deadlines often disrupt the deal flow. Loans have been closed in as little as two weeks, but this is an Exception, not the norm. Discuss deal timing with your Loan Officer to set a realistic timetable. Delays with involving or engaging a lender inherently creates pressures on all parties, especially if there is a real deadline such as the expiration of a purchase and sale agreement or an 1031 exchange deadline.