Fast Close Mortgage
Fast Close Mortgages Are Available For Hitting Deadlines That Can’t Be Met With Other Financing Options”
A fast close mortgage with respect to a commercial property is one in which a mortgage can be put in place and funded within 10 to 15 business days from the date of application. A quick closing on a residential home on average is going to close more in a 5 to 10 business day range.
Getting a mortgage in place faster than what’s outlined above may be possible, but will also be difficult to achieve in most cases.
Remember that we are talking about the time period from when you first make contact with a lender to the day the deal is funded. The initial deal assessment and all due diligence needs to be completed before a mortgage can get registered and funds are released. So depending on something getting done faster can be dangerous for your deal or capital requirement.
Common Situations Requiring a Fast Mortgage Closing
Property acquisition. There are two scenarios here and I’ll quickly go over. The first scenario is when you have an opportunity to acquire a commercial property, but are not given much time to arrange the proceeds. Especially in situations where you are getting a great deal, its going to be important to get the funds together to close the deal in the time you have to work with. If you’re only given 2 or 3 weeks, and you’re not sure if you’re going to be given a time extension, that’s going to be hard to achieve through a bank or institutional lender. So its better to off focusing on faster close mortgage options so you know you’re going to get closed by your deadline.
The other land purchasing scenario is where you have been at it for quite some time with one or more conventional lenders and potentially have already received several time extensions. Its not unusual for a commercial mortgage approval and funding process to take 2 to 3 months. If the process is dragging on and you’re starting to run out of time, make sure you leave yourself at least 2 or 3 weeks to consider faster closing options. Once again, if you wait too long you may not be able to get an alternative in place quickly enough to save the deal.
In both these situations, even though you could qualify for a bank or institutional mortgage solution, the issue here is time and using it to get capital in place before opportunity is lost. Many times business owners and commercial property owners will not consider faster close financing scenarios because they feel they shouldn’t need to based on the strength of their financial profile. But once again, getting funds in place quickly does not mean you have to first strike out with bank options, its about what is relevant for the situation.
Bridge Loans. For the purposes of this discussion, we are talking about bridge loans related to non property acquisition transactions. Bridge financing can be required for almost a limitless number of things and the timing to get the required capital in place can very considerably from deal to deal. One of the reasons bridge financing requirements turn to commercial property lending is that trying to leverage other types of assets can be considerably more costly, time depending, and unpredictable.
Bridge financing against real estate on the other hand can be put into place rather quickly, and depending on the specific scenario, could be accomplished through a fast close commercial mortgage. In business, many times bridge loans are required to supplement cash flow both in terms of opportunities the business wants to take advantage of, and costs they are trying to avoid or get under control. Regardless of the cash flow need, if the is sufficient equity in commercial real estate property available, a short term loan can potentially be arranged to provide the necessary capital to the business owner.
Another form of bridge loan we deal with where a fast mortgage closing is typically required is in building construction and land development scenarios. In these situations, a construction or development project has run short of cash to complete the current stage of work. The short fall may have come from cost overruns, changes in scope, or some unplanned event that was not covered off in the original budget. Regardless of the reason, the project is now in need of incremental capital quickly or it will start to slow down and potentially stall out which can lead to all sorts of contract difficulties and eventual project failure.
Key Elements Of A Fast Mortgage Closing
First of all, the primary source of fast close mortgages are private mortgage lenders. However, the actual private lenders that can perform a fast mortgage closing are a very small percentage of the overall group. This is because the lender has to be set up to intake and close these types of deals which involves having a working team that is able to turn things around in the time required.
A good working team includes a mortgage broker and lawyer that regularly work on fast close mortgage requests and who can respond quickly to a mortgage opportunity a lender wants to take advantage of.
Working off of the last point, its going to be important to be working with a commercial mortgage broker or agent that has experience with quick close requests and that works with private lenders that can turn things around quickly. Many times mortgage brokers or agents will claim to be able to achieve this for you, but in essence they do not have the expertise or resources themselves and instead send your deal onto other brokers in the hope that one of them will be able to help you out.
A mortgage professional is also important to the process in that almost all private lenders work through mortgage brokers to not only originate their deals, but to work on the loan assessment, closing, and administration process as well. So getting in contact with a mortgage professional with fast close mortgage experience and a relevant lender network is going to be very important to getting your deal completed on time.
If you’re in need of fast mortgage closing right now, then I suggest that you give me a call so we can quickly go over your situation and requirements and discuss relevant options that are available to you in the market.