With pre-qualification out of the way and a lender working with you to secure a commercial mortgage for income generating property in Texas, you are well on your way to making your dreams come true. However, the hard work is just beginning.
If your pre-qualification process was rigorous, then you are well on your way to completing the actual application for your loan. While it might have been frustrating at the time, you will no doubt be grateful for it as the process goes along. However, if you did not have to provide much documentation for your pre-qualification, then you are definitely going to have your work cut out for you. The application process for a commercial mortgage in Texas can be quite long and can confuse even the smartest of business people, so do not hesitate to ask plenty of questions of your loan officer.
If you did not have to provide documentation for your pre-qualification, you will have to gather financial documents to show not only your ability to pay back the mortgage, but also your history of how you have handled debt. This usually includes proof of income, tax documentation, other assets and business information. It also might include balance sheets, income statements and business plans, especially if the property is going to be used to house other businesses as rentals. Lenders are looking for security when they grant commercial mortgages and all of these things become factors not only in their decision to grant the loan, but also in the rate and terms that they are willing to offer.
With a traditional mortgage, there are a couple of things that need to be taken care of before the underwriting of the loan can actually begin. Before any movement can be made toward obtaining a loan, the title of the property and the title company that will be representing it must be chosen. It is up to the borrower to select the company that will be closing the loan (once it is underwritten) and will be providing title insurance. This helps to secure the commercial mortgage against title fraud and is absolutely necessary for lenders to be able to approve a loan. At this time, it is also decided whether the borrower will be covering title and insurance costs separately or as part of the mortgage, all rolled into one. Unless you have a very good reason to divide them, it is most likely in your best interest to lump them together.
What happens with a commercial mortgage in Texas after all of the paperwork has been processed and the underwriting process begins?
Once the underwriting process has begun (this could take up to 2 months), there will be a lot of waiting. But there are still things that will need to be done in order for the transaction to go smoothly. One such thing is for the borrower to get the property appraised by a third-party appraiser. This process is also very time consuming and can take up to 3 weeks to complete so it is best to start this early. In addition to this, you must be prepared to provide additional documentation, as needed, to the lender. It is very possible that they will need nothing else to secure your commercial mortgage, but if they do, it would be best to provide it quickly to not interrupt the process.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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