The whole process when it comes to applying for commercial mortgages is obviously less than thrilling and actually dreaded by many. But you can take all of the agony out of the process by being prepared and knowing what to expect. First, it is good to know what a letter of interest from a lender is. Remember, it is not always a commitment like you think it maybe. It is actually just a letter listing the terms of the deal. These terms can change until finalized. At first, the letter of interest is usually very simple with just a small amount of information for both parties to review.
But adjustments to a letter of interest is sometimes necessary. Most of the time, these changes usually include adjustments that are part of the final terms. These adjustments could go either way and could negatively or positively impact the borrower. So, that is why it is so important to always keep the line of communication wide open during the entire process and to know where everything stands throughout the application period.
Also, keep in mind that commercial mortgages will most likely take a lot longer to process compared to residential. The expected time frame for an application from the time of approval to closing time is around six or twelve weeks. When it comes to a residential loan, those usually only take half the time range, taking anywhere from three to six weeks from application approval to close. But it is important to keep in mind that many variables will play a part in the timeline.
It isn’t uncommon for lenders to use third-party companies to complete reports during the entire process. But keep in mind that the revelations or opinions that are provided in these reports by the third parties is completely out of the lenders control. The third parties usually will have a time frame that the reports need to be completed in, but again, as long as they’re done in that specified time frame, lenders have no say in the amount of time it takes for them to process these reports.
It is best to stay calm and try to not be too scared when it comes to applying for commercial mortgages. The application process is actually very similar to other loan processes, so don’t stress too much. Just make sure to do your research and know what you are doing before making any final decisions. Also keep an open communication line at all times so you know what to expect throughout the whole process.
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.