The commercial loan process may seem far from simple. We'll walk you through the process so that you can feel confident about making a home loan decision. We'll explain every step of the commercial loan process, including a breakdown of all fees and costs. You’ll also know exactly when and how to submit your application. Here are the following major milestones you will reach as we process your commercial mortgage application.
* First you will fill out a short application
* Second you will pay the application fee
* Third you will sign your full application
LOAN IS SUBMITTED TO PROCESSING
Your Loan Officer collects and verify all documents necessary to prepare the commercial loan for underwriting. This will allow us to know you "the borrower", and the property you are financing.
During processing, the account processor:
* Begins verifying assets
* Orders a home appraisal to determine the value of the property (if/when needed)
* Runs various compliance and eligibility checks to ensure the process advances quickly and smoothly
Common documentation requested by underwriting includes, but is not limited to:
* Evidence of Earnest Money
* Asset Verification
* Borrower Letter of Explanation (LOX) "when applicable"
* Gift Letter
* Fully Executed Purchase & Sales Agreement
* Source Large Deposits
* Verification of Employment (VOE) "when applicable"
Next step: Processing submits the loan file to underwriting for initial review and approval.
LOAN IS SUBMITED TO THE UNDERWRITER
The Underwriter begins the loan underwriting process, reviewing all documentation to determine whether you qualify for a commercial mortgage.
While the Loan Officer will do his/her best to submit a complete file during loan underwriting, an Underwriter may still have questions and/or require additional documentation to satisfy any conditions for a final approval.
In addition to the loan file submitted by processing, the Underwriter examines:
* The completed appraisal
* Credit Report
* Other ancillary documentation pertinent to the loan
If the loan is approved, the borrower receives a list of conditions required to be met before receiving final approval and notification of Clear to Close.
Next step: The processing team provides you with underwriting's preliminary decision on the loan.
LOAN IS CONDITIONALLY APPROVED
What is conditional approval ?
A conditional loan approval means that the Underwriter has signed-off on the parameters of the loan and most of the documentation, but still needs a few more items before fully approving the borrower for the loan.
The processing team contacts you to review the conditional approval mortgage and discuss any additional required items, as well as any ancillary documents that are needed to finalize the loan. This documentation can include, but is not limited to:
* The completed appraisal (or updates to the existing report)
* Additional verifications
* Standard in-house items required for closing
Once all conditions have been obtained, the processing team will send the file back to the underwriter for a final review and approval.
Next step: Once the loan is approved, a Mortgage Professional will schedule the closing
LOAN IS CLEAR TO CLOSE
"Clear to Close" means the Underwriter has signed-off on all documents and issued a final approval.
The mortgage team schedules your closing and reviews the HUD-1 Settlement Statement.
* The HUD-1 Settlement Statement, is a standardized mortgage lending document that details the finalized terms for the loan, including a breakdown of all costs and fees.
Next step: Closing the Mortgage
Closing processes vary slightly depending on the type of transaction, as well as local, state and municipal laws.
The type of transaction - purchase or refinance - determines who can provide you with accurate final numbers.
* Purchase: You can receive stimated figures from your Mortgage Professional, but they'll need to speak with your local Title Company and/or Real Estate Attorney for a final amount.
* Refinance: In most states, you won;t be required to use an attorney to close. In that case, you should speak with your Mortgage Professional for the bottowm-line.
What to bring to the closing:
* Photo Identification
* Bank Check or wire from an approved account to cover the closing costs and down payment (unless the money was wired). NOTE: Your mortgage team will advise the best way to transfer funds for your closing.
Whether purchasing or refinancing, prepare to sign a lot of documents!
* Purchase: While the process varies by state, typically a professional explains every document and notes where to sign. The lender's wire may need to clear before you're handed the house keys and provided with copies of all the documents.
* Revinace: Depending on local laws, an agent from the title company will explain each document to be signed. If refinancing a primary residence, the loan will fund once the 3-day right of rescission has expired. If refinancing an investment property or sencond home, the loan will find on the same day.
Next step: Funding the mortgage.
LOAN HAS BEEN FUNDED
The final step on the loan process is now complete: Your loan has been funded!
At this time, all documentations is complete and the funds for the loan have been discursed to the seller (purchase) or to the payoff of the prior loan (refinance).
You should receive your first payment statement at the closing. This should be used to make the first and possibly sencond loan payment.
* If you did not receive the statement or cannot find it, you can reach out to your Mortgage Professioanl for a copy
Final Step: You'll receive correspondence in the mail from the final servicer (the company to which you will make all subsequent payments). This information details where to make future payments and how to set up auto-pay if desired.
Hopefully, this breakdown helps you understand the inner-workings of the mortgage process. Don't hesitate to contact us with your specific questions along the way. We're here to simplify a complex process and to provide the kind of personal service and advice you deserve. We're here to get you home.
*** Beyond Financing cannot guarantee that an applicant will be approved or that a closing can occur within a specific timeframe. All dates are estimates and will vary based on all involved parties level of participation at any stage of the loan process.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Beyond Financing for current rates and for more information. All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Beyond Financing, Inc. does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Beyond Financing, Inc. Beyond Financing, Inc. its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action. Beyond Financing does not provide tax advice. Please contact your tax adviser for any tax related questions.