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Commercial Lending loan Process
1. Organize Your Documents
A properly documented loan
application makes your loan process go smoothly. This checklist will
help you gather your paperwork.
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Complete and sign
the commercial loan application.
If you make a mistake while filling
out the application cross it out, and make a change. Do NOT use
whiteout.
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If you are salaried: provide
W-2's for the previous two years and one month of paystubs. If you
are self-employed, provide tax returns for the previous two
years, including all schedules, and a YTD profit and loss
statement. (Note: provide copies of all requested documents. Do
not provide original documents.)
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If you own rental property, provide
recent rental agreements and tax returns for the previous two
years, including all schedules.
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To speed up the approval process,
provide bank statements for the most recent three months, and
recent statements for stock, mutual funds and IRA/401K accounts.
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If you are requesting a cash out
refinance, provide a letter explaining how you will use the
refinance proceeds.
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If applicable, provide a copy of
your divorce decree and settlement agreement.
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If you are NOT a US citizen, provide
a copy of your green card (front & back). If you are NOT a
permanent resident provide a copy of your H-1 or L-1 visa.
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If any borrower has filed
bankruptcy, provide the Discharge Notice, Filing and Schedule of
Creditors.
2. Get Qualified
Getting qualified before you apply
for a loan can help you understand how much you can borrow.
When buying a commercial property you
may be pre-qualified or pre-approved. You can be pre-qualified over
the phone or on the Internet in a few minutes. Pre-qualification is
not as useful as pre-approval. Pre-approval requires a more rigorous
process, including verification of your credit, income, assets and
liabilities. It is highly recommended that you be pre-approved
before you start looking for a commercial property
Being pre-approved will:
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Inform you of your maximum
affordable property value, and save you from previewing properties
outside your price range.
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Put you in a stronger negotiating
position with the seller, because the seller will know your loan
is pre-approved.
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Help you close quickly, since your
loan is pre-approved.
3. Shop Loan Programs and Rates
What loan program is best for your
situation? Lenders offer many different loan options:
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Think about how long you plan to
keep the loan. If you plan to sell your property in a few
years, you may want to consider an adjustable rate or balloon
loan. If you plan to keep your property for a longer time, you may
want to consider a fixed rate loan.
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Understand the relationship
between rates and points. Points are considered prepaid
interest and may be tax deductible. Each point is equal to 1
percent of the loan. For example 1 point on a $150,000 loan is
$1,500. The more points you pay, the lower your rate.
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Compare different loan programs.
With so many programs to choose from, it's hard to figure out
which program is best for you. Consult an experienced loan officer
who can help you find a loan program that best fits your short-
and long-term plans.
4. Obtain Loan Approval
Once your loan application has been
received, we will start the loan approval process immediately. This
involves verifying your:
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Credit history
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Employment history
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Assets including your bank accounts,
stocks, mutual fund, retirement accounts , and life insurance
plans.
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Property value
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Based on your specific situation,
additional documents or verifications may be required.
To improve your chances of getting a
loan approval:
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Fill out the commercial loan
application completely.
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Respond promptly to any requests for
additional documents. This is especially critical if your rate is
locked or if you plan to close by a certain date.
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Do not make any major purchases. Do
not buy a car, furniture or another property till your loan is
closed.
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Anything that causes your debts to
increase might have an adverse affect on your current application.
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Do not move money into your bank
accounts unless it can be traced. If you are receiving money from
friends, family or other relatives, please contact us.
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Do not go out of town around the
closing date. If you do plan to be out of town when your loan is
expected to close, you may sign a power of attorney, to authorize
another individual to sign on your behalf.
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Notify your loan officer before
applying for any other credit, including credit cards, personal
loans or even with another mortgage company. Some loan programs
have strict guidelines regarding your credit score. Credit
inquiries may lower your credit score and may have an adverse
affect on your loan approval.
5. Close the Loan
After your loan is approved, you will
be required to sign the final loan documents. This will normally
take place in the presence of a notary public. Be prepared to:
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Bring a cashiers check for your down
payment and closing costs if required. Personal checks are
normally NOT accepted.
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Review the final loan documents.
Make sure that the interest rate and loan terms are what you were
promised. Also, verify the accuracy of the name and address on the
loan documents.
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Sign the loan documents. The notary
will require that you have your picture ID with you. Some lenders
also require to see your Social Security card.
Your loan will normally close shortly
after you have signed the loan documents.
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