Where do loan applications go wrong?

Speed is the end-all and be-all in the real estate investing world. “How fast can I close?” is the second most popular question that borrowers will ask their lender, right after the burning question, “What is my interest rate?” 

We’ll tackle the ins and outs of interest rates in a different blog, but for now, let’s dig deeper into the first question to help you get a better understanding of where loan applications go wrong.  

Every good lender should know that they need to move quickly and get you to your closing on time with full transparency. Yet, things go wrong, and closings get delayed. We’ll outline some of the top reasons the closing process gets pushed back and share some tips to help you avoid these awkward situations.

A Phone Conversation Isn’t A Loan Application.

Yes, we spoke on the phone. Yes, we sent you a term sheet on your deal. Yes, we are confident that you’ll be a great borrower. However, we can’t technically get started until we have your signed loan application. We’ll help make it easy, but we can’t pull credit or run your background check without it. Sometimes we move forward and mark that a document is missing but don’t lose progress while we are waiting. A signed loan application is the exception. We won’t move forward without one! 

You Gave Us The Application. Thank You! We Still Need That “Stuff” We Asked For.

When you applied, we gave you a small list of documents that we need. We must have these, too! You may think that your ID isn’t important, but we can’t order title insurance or start to prepare loan documents without it. You may think that a screenshot of your bank account is fine, but we ask for your bank account statements for a reason. The faster you provide us with exactly what we’re looking for, the faster we’ll get moving!

The Appraisal Takes Time And We’re Not In Control.  

Our advice? Pay for the appraisal immediately. Often, appraisers will not get started until payment is confirmed. Also, schedule that inspection right away. Many borrowers believe that once it’s inspected, we will get the report that day. This is not the case. Appraisers can take time to provide the report post-inspection. Don’t make assumptions that can cost you time.

Title Insurance Is Not Instant.  

Many title companies turn around orders quickly. However, there are markets where title orders can take weeks! Make sure you provide contact information to the title agent with the loan application so we can immediately identify any issues.  

This Is A Loan.  

There are multiple parties involved: You, the seller, the realtors, the title agent, your lender, our attorney, and so on. Be patient but quickly respond when someone needs something. Don’t waste time asking “why,” because time is money! 

By now, you should be a loan pro! Time is money, and speed is what you should aim for when going through the loan application process. Choose Lendmarq to begin your real estate investing journey! 

Contact our real estate professionals to get started today!