“I have made an offer on a property and have removed conditions. Can you tell me what my financing options are?” This is a statement we hear multiple times a week from borrowers across the country that commit to tranasctions without knowing what financing options they have.
While it may not make sense to you why a borrower would do this please be assured that it happens all the time. Most borrowers don’t know that a bank or lender needs to:
– Review the transaction details
– Complete their own internal underwriting and due diligence process
– Work with their lawyer to make sure the transaction is funded properly
As mentioned in previous posts, this work can take up to 12 weeks with a Traditional Bank, 6 weeks with a Mid Market Lender and 2-3 weeks with a Private Lender. Depending on your timeframe, you may qualify for a Traditional Bank but require a Private Lender to close it because there isn’t enough time to close it with a Traditional Bank. We often see transactions close with private type financing only to be replaced or refinanced later with a Traditional Bank.
If you want to make an easy job seem mighty hard, just keep putting off doing it. Financing doesn’t need to be a difficult task however if you move forward with a transaction and do not know your financing options you may have to pay a higher interest rate and other costs as a result of not planning properly.