To
whom do I send inquiries and executive summaries?
Fax all summaries and questions to the commercial loan department
in our MAIN OFFICE at fax (603) 279-5912 or (603) 279-4278.
The company phone number is (603) 279-1133. You will be assigned
to a specific loan officer who will handle all of your questions
in order to speed up the underwriting process and keep communication
simple and clear.
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How long does it take
to close a loan?
Commercial loans take 30-90 days. However, in some hard
money circumstances a loan can close in less than 30 days.
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Do you make
loans with no money down?
Absolutely Not. Loans must have a minimum cash down payment
of 10%-30% of the purchase price. However, in some cases
the seller is allowed to hold back a second mortgage if
the borrower does not have more than 10% down.
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If the appraised
value is greater than the purchase price, can you finance
the full purchase price?
Example: If the appraised value is $1,500,000 and the purchase
price is $1,000,000, can we finance the full purchase price
at $1,000,000?
Absolutely Not. The property value for loan purposes is
based on the LESSER of purchase price or appraised value.
The principle is called, “willing-buyer/willing-seller.
The concept is that a seller will sell his property for
what it is worth, and a buyer will buy the property for
no more than what it is worth. However, if an appraiser
concludes the value is less than what a willing-buyer/willing-seller
have agreed to, then the appraisal value will be used for
underwriting the loan.
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Do you make
commercial construction loans?
Yes, we are aggressive with construction loans on apartment
complexes, nursing homes, assisted living facilities, and
mobile home parks, where the loan amount is greater than $1,000,000
at up to 90% LTV. As for construction loans on owner occupied
properties we can also make a loan up to 90% LTV if the borrower
meets our SBA program guidelines. Outside these property types
the borrower will most likely need to have funds available
for a 20 to 30% down payment. We also make residential and
commercial hard money construction loans for borrowers or
contractors who are in a bind.
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Do you make
second mortgages?
Never. We only make first mortgages. Please do not send
us a request for a second mortgage. However, sometimes the
answer to a borrower’s request for a second mortgage is
to make them a cash-out refinance new FIRST mortgage. Usually
this is limited to 65-75% LTV. Thus, you should explore
this option with your borrower.
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Who pays
for closing costs and appraisals?
The borrower is always responsible for these costs. Some
closing costs may be financed on refinance transactions.
Appraisals are paid for in advance once a Letter of Intent
is issued. In every loan we make there are loan charges
known as points, sometimes the points are as low as 2 and
sometimes as high as 10. A point =1%. Many factors determine
the number of points charged: type of property, type of
loan, loan amount, credit grade of the borrower, etc.
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Are there
any up front fees?
Maybe. In some cases we will require a due diligence fee
to cover third party expenses such as an appraisal, an environmental
study and title work. The fee is paid after we have reviewed
all documents provided by the borrower and the terms have
been accepted. We also require a processing fee to be paid
after the borrower has accepted the terms.
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Who works
with the borrower?
We would prefer to work with the borrower once our terms
are accepted, but if you want to continue working with the
borrower this is usually acceptable. However, we do have
a policy of only accepting loans that have no more than
one person between the borrower and us. Our goal is to avoid
a chain of brokers and wasting time on a loan that is not
likely to close. If we work with the borrower, we will send
you a non-circumvention agreement for your protection. We
will also send you a fee agreement acknowledging what you
will receive upon a successful closing.
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What is the
loan process?
Send us a detailed executive summary
and requested information. (2) If the loan is more complex
or if we have further questions or needs, we will request
additional information from you. (3) Once we have enough
information we will give you approximate loan terms within
5-7 business days. (4) Upon acceptance of the terms, we
will issue a Letter of Intent and have the borrower sign
an agreement that outlines the terms, costs and the procedural
items needed. (5) At this point we would ideally like to
work directly with borrower, but you may continue to do
so if necessary. (6) The appraisal, title work, and due
diligence is then completed. (7) The closing takes place.
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Why should
I add commercial loans to the services I offer my clients?
Residential loans have peaks and valleys based on the economy
and interest rates, thus supplementing with commercial loans
can help you through tough times. (2) Commercial loans are
not as volatile since interest rates do not change as often,
there is always a need for commercial capital, and the money
supply for Grade “B-C" and Grade “D” loans is plentiful.
(3) Local banks do tighten and relax commercial loan parameters
from time to time based on local and regional economic conditions
but from a national perspective, the market stays consistent.
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