The Ultimate Guide To The Underwriting Process

December 29, 2021/in Blog /by Bruce Kent

If you’re someone who invests in properties often and uses mortgages to finance your purchase, this blog post is probably what you’re looking for.

Mortgage lenders assess your creditworthiness via a process known as underwriting. This process determines whether it’s safe to approve your loan or not. Here’s all that you need to know about it.

What Is Mortgage Underwriting?

A mortgage lender assesses the risk of lending money to you through the underwriting process. Whether you’re borrowing from a private lender, a bank, or a credit union, they will assess if you’ll be able to repay the loan or not before approving your mortgage application.

This involves collecting the necessary documents for your application, such as your financial assets, income, equity investment, cash reserves, and other risks involved, and then verifying the information you’ve provided.

What Does A Mortgage Underwriter Do?

A mortgage underwriter will assess the delinquency risk in approving your loan. That is, it’ll look into the overall risk if you’re unable to repay the mortgage.

For that, the underwriter evaluates factors that determine your financial position, such as your credit report, credit score, and the property you’re considering buying.

The underwriter will document their assessments and weigh different elements and aspects of your loan application as a whole to finally decide if the risk is worth taking or not.

The loan can still be approved if a borrower falls short in any one area based on the strength of the other factors involved in determining the approval.

How Long Does Mortgage Underwriting Take?

The mortgage underwriting process can end in a few days or even take a few weeks, depending on whether the underwriter needs any additional information to access your application and how streamlined and transparent the lender’s practices are.

The quicker you submit your documents, the faster and smoother the process will be. However, underwriting is just a part of the overall lending process. You’ll only get loan approval and not the amount when done with the underwriting process.

If you’re looking to get a hard money loan, look no further than Commercial Private Equity. From construction loans to commercial property loans, we’re here to fund all your projects.

Apart from loans, we also provide commercial hard money loan consultation to guide you on the best practices for borrowing and repaying the amount.

Contact us to get your hard money loans sorted.

The Do’s And Don’ts Of Buying A Raw Land

December 27, 2021/in Blog /by Bruce Kent

Buying vacant land is the best way to invest your money. You can also grow your business by building commercial or residential structures on the location.

But before you get into this journey, it’s essential to consider the various aspects of buying raw land to prevent your dream project from turning into a headache and, ultimately, your worst nightmare.

Consider the following dos and don’ts to avoid buyer’s remorse.

Do Hire an Agent to Find the Land

A real estate agent who has extensive experience can help in navigating and negotiating land deals. Don’t entirely rely on them.

Do your research and reach out to an agent who has previously worked with both buyers and sellers for land transactions to avoid any legal issues in the buying process.

Do Have Your Finances in Place

Before seeking to purchase land, you must know how much you can afford to spend. Remember that land purchases are primarily made in cash.

Therefore, determine your budget by looking at the cash you have in hand and then look for properties accordingly; that’ll help save you time and effort.

Don’t Skip the Environmental Tests

Like background research for a home, vacant land also needs to be well-researched, tested, and checked to ensure that the place is suitable for the purpose you’re buying it, and most importantly, you’ll be able to build on it.

Check the soil for contamination by conducting environmental tests because if the soil is contaminated for any reason, residential or commercial structures can’t be built there.

Don’t Forget the Survey

If the land has been vacant for years, there are chances the neighbors, whether intentionally or not, may have infringed it beyond the property lines.

To identify clear-cut boundaries, you must have a surveyor look at your property. A land with a completed survey, geology, and soils report is the best one to go for.

If you’re looking to invest in raw land, hard money loans are the best option to finance your investment. Commercial Private Equity is a leading commercial private money lender based in Atlanta, GA, for commercial bridge loans.

Contact us to finance your project.

private money lenders can help finance real estate properties

Are Hard Money Loans Worth It?

December 21, 2021/in Blog /by Bruce Kent

The rumors of hard money lenders being shady and having high hidden interest rates have been circulating for a long time now.

A few investors still fret when considering working with hard money lenders. However, with various states making licensing compulsory and putting strict regulations on hard money lenders, the situation is favorable now.

The advantages of hard money loans outweigh all the other conventional lending options available, proving to be highly rewarding for borrowers.

This blog will shine a light on the benefits you reap with hard money loans.

Your Loan Applications Are Approved Quickly

Banks and other traditional sources require a lot of documentation and reassurance. They’ll ask for your credit accounts details, income, business details, and whatnot to proceed with the approval.

If anything isn’t up to the mark, they’ll reject your application for a loan. If approved, there’s still a long way to go until you’re funded.

This pushes the investors to see the help of hard money lenders. Although they also keep the property as collateral before approving your loans, they aren’t interested in your credit. If the loan amount is equal to the value of your investment, you’ll get the loan.

They Process Loans Swiftly

A bank will take approximately 30 days to grant the loan, which is a large time frame for real estate investors as the property values fluctuate daily.

On the other hand, hard money loans are processed in no time compared to conventional bank loans. Therefore it proves to be an attractive alternative for investors as they can seal more investment contracts with hard money loans within the same timeframe.

Hard Money Loans Are Convenient

In today’s time, people ready to pay more to get good services. The low-interest loans provided by the banks might attract the borrowers, but the requirements of tax returns, bank statements, leases, and income documentation, ultimately drain them out.

Real estate investors, in particular, do not favor these time-consuming processes and gravitate towards hard money loans instead.

They might charge you slightly higher interest, but your loan will be approved quickly with no hassle of document collection and submission.

Are you looking for hard money loans for your next investment project? Commercial Private Equity is here to help you out.

From providing hard money loan consultation to closing your loans, we guide you through each step to make money lending a smooth process for you. We’re one of the most reputed private commercial real estate lenders in Atlanta, GA.

Contact us now for more information.

man filling out a hard money loan application

Foreclosure: Everything You Need To Know

December 15, 2021/in Blog /by Bruce Kent

A legal action that lenders take when borrowers default on their loans is called a foreclosure. If you’ve borrowed money and are facing foreclosure, you can face long-term consequences.

In such circumstances, a hard money lender comes to your rescue by offering loan modifications. They try to modify your monthly payments to make them more affordable for you. However, they’ll also receive some monthly payments. Here’s all you need to know about the process:

What Is Foreclosure?

When you take a loan, you agree to the lender’s condition of reclaiming the property if you stop making payments on your loan. The foreclosure process can be non-judicial or judicial, depending on your state laws. Some even have both options available.

In a judicial foreclosure, a lawsuit is filed by the lender for a foreclosure. The court will then inform the borrower, who then fights the lawsuit; if they lose, the property is auctioned as a foreclosure by the bank or the lender.

In non-judicial foreclosures, if the borrower stops making payments, the power-of-sale mortgage clause helps recoup the balance owed by the borrowers. It authorizes the trustees (appointed by the lender) to sell the property to pay off the balance. The process is faster than under a judicial foreclosure as there is no court hearing.

When Does Foreclosure Begin?

When they fail to repay their mortgage installments, borrowers usually go through a series of steps before they face foreclosure. Defaulting your repayment agreement with your lender and failing to repay using alternative arrangements will result in foreclosure.

The repayment conditions are mentioned in the agreement you signed as part of your mortgage commitment. Be careful to refer to your agreement for particular rules governing your mortgage, as these agreements may differ by jurisdiction and lender.

What if the Property Sells for Less than I Owe?

If your property sells for less than the balance you owe to the bank or the lender, the lender files a deficiency judgment. It’s a lawsuit that requests the borrower to repay the remainder of the loan amount.

For example, if you owe $500,000 on your loan, but the property only sells for $375,000, $125,000 is still deficient. The lender then tries to recover that amount from you in terms of cash or any other payment method.

However, some states restrict deficiency judgments after foreclosure and have anti-deficiency laws.

Looking for private money lenders in Atlanta, GA? Get in touch with Commercial Private Equity. Apart from loans, we also provide commercial hard money loan consultation to guide you on the best practices for borrowing and repaying loans.

Contact us to get your hard money loans sorted.

private money lenders don't require good credit scores or repayment records

Why Choose Hard Money Loans Over Traditional Lending

December 13, 2021/in Blog /by Bruce Kent

The process of applying for a hard money loan is similar to that of a traditional loan. If it’s approved, you’re given a loan. You’re then required to repay the amount with interest over a predetermined time.

However, getting conventional loans can be challenging and time-consuming; the bank has stringent criteria that you’ll need to meet. That’s when private money lending steps in. It’s a more appealing option for commercial investors because of the relaxed rules and regulations.

This blog will guide you about those relaxed rules and how you can benefit from them.

Speed of Approval and Funding

Hard money loans are approved faster than conventional bank loans. On average, your bank will take around 30 days to approve your application. Once the bank approves the application, it’ll take additional three business days to fund your loan.

This is a disadvantage for property buyers as the seller might not wait long to get your loan approved.

On the contrary, hard money loans can be funded in seven business days. The hard money lenders are aware of how crucial time is for real estate investors, so they process approvals quickly.

Debt to Income (DTI) Ratio vs. Loan to Value Ratio (LTV)

Creditworthiness is a crucial factor in the approval of your bank loan. Banks will look into whether you have enough money to repay it or not. This is why they look into your salary slips, employment proof, and your account’s credit report.

Using the documents you provide, a DTI ratio is calculated by dividing your monthly debt payments by your monthly gross income.

For example, if your gross income is about $8000, and your credit card bill is about $2000, this means your DTI is 25% (2000/8000 * 100). Banks usually require a DTI of less than 45%.

On the contrary, the soundness of the investment for which you’re taking a loan is what interests the hard money lenders. They look if the value of your investment asset can cover the loan they’re providing or not.

This is why they look into property appraisals when considering your loan application. Using the information you provide, an LTV ratio is calculated by dividing your requested loan amount by the appraised value of your asset.

For example: If you need a loan of $60,000 to buy a property, and the value of that property is expected to reach $100,000 at the time of your repayment, your LTV ratio is 60% (60000/100000*100).

The smaller the LTV ratio, the profitable it is.

Reach Out to Commercial Private Equity for Hard Money Loans

If you’re looking for commercial hard money lenders, look no further than Commercial Private Equity. With more than 75 years of experience, we help you find the most cost-effective source of gathering short-term capital.

Contact us for commercial hard money loans to boost your real estate business.

Things to Consider when Building your new office – Infographic

December 8, 2021/in Blog /by Bruce Kent

It’s important to do your research during the office buying process for your business; you can’t believe everything you hear.

Before you break the ground and start pouring the foundation, you need to take a few considerations into account.