From Application to Closing, How Fast Can You Get a Mortgage?
Traditional lenders, like banks, can require 30-60 days for investment mortgages. Other lenders can close in as fast as 7 days. Why is there such a difference between the two?
The short answer: consumer mortgages (like for your primary residence) can require 30-45 days. Loans for investment properties can take even longer (30-60 days or more). However, private lenders operate on their own timeline. Hard money lenders (also known as “bridge” lenders) like Capstone Capital Partners can approve you in as fast as seven days if you have an appraisal in hand!
With multiple factors to consider including your credit score, loan amount, future financial security, and more, looking into the logistics of such a large purchase can span weeks if not months.
Getting pre-approved for a loan through a trusted lender can shorten the process overall, but what steps are taken to speed up the application and closing process? Read on to learn more about the steps from application to closing, as well as what can speed up and slow down the process for borrowers.
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What Are the Basic Steps From Application to Closing?
The speed at which you can secure a loan from a hard money lender can be significantly faster than traditional financing options, especially if you have an appraisal already in hand. Here's a breakdown of the timeline from application to closing:
Application and Approval:
Hard money lenders typically focus more on the property’s value rather than your credit score or income, so the approval process is faster. Once you submit an application and provide basic documentation (such as the property details and possibly some financial info), the lender can approve your loan quickly. This stage typically takes 1-3 days.
Property Appraisal/Inspection:
A hard money lender might require a property appraisal or inspection to verify its value, but they tend to use quicker, less formal appraisals than traditional lenders. This process can take anywhere from a day to a week.
Loan Offer and Negotiation:
After reviewing the application and appraisal, the lender will present you with a loan offer. This may take 1-2 days depending on the lender and the specifics of the deal. Negotiations on the terms can sometimes add another day or two, but the flexibility of hard money lenders often speeds up this process.
Closing:
The closing process can be completed relatively quickly—sometimes in as few as seven days after the loan offer is accepted. Hard money lenders are known for their flexibility and streamlined approach, allowing them to bypass much of the paperwork and waiting periods common with traditional mortgages.
What Does “Appraisal In Hand” Mean for Borrowers?
When a borrower or lender refers to having the "appraisal in hand," they are saying that the property appraisal report has already been completed and delivered to the parties involved in the transaction. This means:
The Lender Has the Report: The appraisal is completed, and the lender has reviewed it. They now know the value of the property, which is a crucial piece of information for determining how much they are willing to lend.
The Property’s Value is Established: The lender uses the appraisal to ensure that the property's market value justifies the loan amount being requested. If the property is worth less than expected, the lender may adjust the loan offer or reject it.
Streamlined Closing: Having the appraisal in hand before the loan is formally approved or closing is a step that can speed up the process. It avoids delays caused by waiting for the appraisal report and can ensure that closing happens more quickly, especially if the appraisal results are favorable.
In short, when the appraisal is in hand, the lender already has all the information they need about the property’s value, which helps avoid delays in processing and approval.
How Can a Borrower Speed Up the Process?
To speed up the process, borrowers can take a number of proactive steps that help streamline the entire process to get you closed in as fast as seven days. Here are some tips to accelerate your application from start to finish:
Organize Your Documentation: Lenders will ask for multiple documents such as proof of income, bank statements, proof of identity, and more. Prepare documents ahead of time, and be sure to ask lenders exactly what documentation they expect from you so that you can prepare.
Respond Quickly to Requests: Communication is key. When the lender requests additional documentation or clarifications, respond as quickly as possible. Delays in providing this information can push back the timeline. Set up alerts and reminders via phone or email to avoid these potential communication delays.
Work with An Experienced Lender: Choose a lender with a good track record of closing loans quickly. Some lenders or mortgage brokers are more efficient than others. You can ask about their typical timelines and any steps you can take to help move things along.
Use a Local Lender: Working with a local lender (rather than a national one) might lead to faster communication and quicker responses, as they’re more familiar with local market conditions and the area's specific requirements for acquiring a hard money loan with a quick turnaround.
Get a Feel for Their Qualification Requirements: Any lender should have basic information about their lending parameters on their website. If you don’t fulfill one of the requirements, come prepared to your first conversation with information on why that is. Provide strong and multiple testifying documents to prove the other requirements you do fulfill are very strong. This cuts down on the time your lender will take to determine whether they can look past the qualification(s) you’re not meeting.
By staying organized, responsive, and proactive throughout the process, borrowers can help speed up their application and reduce the likelihood of delays. The more prepared you are, the faster the lender can process your loan, getting you closed in as little as seven days.
Check out Capstone’s lending parameters.
Explore Investment Mortgages for Residential and Commercial Projects with Capstone Capital Partners
If you are looking into purchasing a home, exploring a new commercial project, and need the assistance of a private lender that offers a smooth, hassle-free loan experience, Capstone Capital Partners is here for you. With Capstone Capital Partners, you get the assistance of financial experts with a proven track record of providing exceptional insight and service for borrowers all across Texas.
To get pre-approved in as little as 24 hours or to speak with one of our team members, answer a few short questions, and we will be in touch!
