3 Factors That Affect Loan Underwriting
When you decide to take out a mortgage or a private equity loan, it’s important to abide by all kinds of underwriting requirements to secure the transaction. From banks, credit unions, and other financial institution to commercial hard money lenders, all kinds of lenders set a specific qualifying criteria before lending you the money.
While you can’t completely mitigate the risks involved in borrowing or lending loans, there’s always something you can do to manage and avoid potential pitfalls. In the private lending industry, experienced nationwide underwriters such as at the Commercial Private Equity take every opportunity to control the apparent risks involved in lending commercial hard money loans.
Let’s find out about all the factors that might affect the underwriting process.
1. Credit Score
Hard money lenders are seldom interested in your credit history. However, traditional banks and credit unions might go over the credit history before giving out a loan. Therefore, obtaining a hard money loan is a much better option.
Having a stellar credit history plays an integral part in the underwriting process for traditional loans, whereas, it doesn’t affect private lending underwriting in the same way.
Your experienced underwriter will examine your capacity to pay back the loan. Some of the main factors that’ll contribute here include your gross income and total monthly debts.
The level of your debt and liabilities directly impact your loan repayment abilities. It also shows whether you can offer the required collateral or not. Ideally, to take out a commercial hard money loan, your loan amount shouldn’t be more than 25-35% of your total income.
If you’re applying for a secured hard money loan, you’ll need to offer adequate collateral as requested by your nationwide private money lender. With a secure asset, your loan is processed swiftly and you’re better able to utilize it to finance your investment or purchase a land.
Underwriters gauge the collateral’s worth to understand whether or not the borrower will be able to pay back the loan.
Are you looking for a reliable hard money lender or underwriter? Look no further than the Commercial Private Equity.
We’re an unfailing, highly-trusted nationwide commercial real estate lending company with industry experience of over 75 years. Our projects include nationwide funding projects ranging from gold mines to motion pictures. Apply today and we’ll evaluate your loan request within 24 hours.
For more details, call us at 404-880-4660 right away!!