Typically, loans are initially submitted through our website and customers provide information regarding the project and their background. Customers are emailed a copy of their application and a list of documents needed to complete the application process.
We also complete an independent background check of the borrower and the entity.
Once we review all the items, the borrower is called to discuss details and answer any questions. If everything looks good, the loan is presented to our Executive team to determine the Interest Rate, Points & Structure of the loan.
It is important to note, that many factors go into the underwriting of a loan. We typically like the borrower to put money into the deal. Other factors that influence our loan terms include: borrower experience, if the subject property has been purchased below market value, the loan-to-value (LTV) and, more important, the after-repair-value (ARV). We typically look for an ARV to be around 70-75% of the loan.
We then present the Term Sheet to the borrower and answer any questions they may have. Once the borrower agrees to the Terms, fees are collected and an appraisal is ordered.
The appraisal usually takes 10-14 days to be completed and returned to the Underwriter for review. This is a crucial part of the underwriting process because we always use an independent third-party appraiser to evaluate the property and provide two values: the “AS IS” value and the “SUBJECT TO” value. This can make or break a deal or in some cases require renegotiation of the deal terms.
Once everything is signed off by the Underwriter, it is scheduled to close.