What to expect as a first-time borrower
As a first-time borrower, you probably have a lot of questions on both the loan process and the types of loans available to you. To begin, we are not a traditional hard money lender. We generally lend for longer terms, and we lend against existing value in a property. We prefer lasting relationships as opposed to churning our loans. Our terms can be more flexible than many hard money lenders because we are the capital source and the actual lender, so we can define the loan program to suit the best needs of the borrower.
Our loan process is also significantly faster than a traditional loan. In a perfect lending situation, we could even determine your loan approval in the same day! Try asking your bank if they can do that for you. We do require an appraisal before finalizing a loan, so that will be the longest part of the process if you don’t already have one.
We don’t base our lending amounts or repayment lengths on your credit score or your income amount. We use the loan-to-value ratio of the loan to determine these. Quite simply, the higher the value of the property, the larger the loan amount we can offer you. This is very different from a traditional bank or mortgage loan that is based primarily on your credit score and income. We offer a far more flexible lending process and a better lending experience overall.
Our loans typically range in duration from one to five years, with the option of doing an interest only loan for up to two years. These may seem like short terms when compared to the mortgage industry, but our loans are designed to get you the property you desire or the money you need in the quickest time possible. Most of our clients eventually either refinance the loan with a more traditional lender or sell the property. Others refinance into a similar loan with us at the end of the term.
Typically, commercial real estate loans carry a higher interest rate than a traditional loan. This is because we lend our own money so we require a higher return than the bank. But in exchange, we can overcome barriers that traditional lending institutions cannot.
As a first-time borrower, we will help you determine the best type of loan for your needs. Our loan officers will walk you through which loan terms make the most sense for you. If we can’t make the type of loan you need, we probably know someone who does.
We look forward to being a valuable resource to you while you navigate the world of real estate investment loans.