Closing a small-balance commercial mortgage doesn’t have to be complicated. In fact, if you work with a lender that truly values a smooth experience, a commercial mortgage transaction process can be quick and utterly painless.
One of the things our brokers like most about working with Silver Hill Funding is our transaction process. As one said recently, “The staff at Silver Hill has always met my expectations. From deal review to underwriting to closing: very efficient, informative, and professional!”
If you’re thinking about partnering with Silver Hill on your next small-balance commercial mortgage transaction, you’ll want to know what to expect at each stage. Here is a quick rundown of our commercial mortgage transaction process.
We’ll also share some tips you can use to expedite the process at certain stages.
The commercial mortgage transaction process begins when you submit your client’s deal in the form of a complete loan application and tri-merge credit report.
From there, our team will analyze a few important aspects, including:
- Property address, including ZIP code
- Property type
- Loan amount requested
- Estimated market value of the property
- Net operating income
- Borrower credit score
If your client’s loan request fits within Silver Hill’s guidelines, your Regional Manager will send you our Letter of Intent (LOI), indicating that we are interested in financing the deal. This typically occurs within 24 hours of submission.
2. LOI Acceptance
The LOI your client receives will include Silver Hill’s pre-approval terms, payment instructions, and additional key conditions.
Once the LOI is accepted and signed, it’s your job to return it to us, along with the $500 upfront fee.
At that point, your Transaction Manager will really get things moving by ordering the property appraisal, title, and any necessary 3rd party reports. This is typically competed within 48-72 hours from when we receive the signed LOI.
3. Processing & Underwriting
In two or three weeks, our team will receive the completed appraisal and results of the other requested 3rd party reports. Then it’s time for our underwriting team to review all required financials and credit documentation.
Of course, the amount of documentation analyzed depends on the loan program your client chose at the beginning of the process. For instance, our Lite Doc Investor Program is a core solution that gives your investor clients the opportunity to secure financing without having to produce tax returns or a 4506T.
You can make a positive impact during the document review stage by regularly communicating with your Transaction Manager and Regional Manager and quickly passing any issues on to the borrower. The goal here is to quickly resolve any missing documentation issues so that the deal can close on schedule.
If there are no issues with the appraisal or 3rd party reports, our underwriting team will pass the deal on to the final underwriting stage. This is when the deal is officially approved and the final loan terms are delivered to the borrower. Once they are signed and returned, our Closing team will work with the Closing Agent to schedule the closing. The approval process should take about 24-72 hours to complete.
5. Closing & Funding
After the Closing Agent sets a date, the title company will prepare the borrower for the closing by instructing them to bring all necessary documentation and proceeds to the event. Once there, the borrower will sign the closing statement and accompanying legal documents.
Of course, the transaction isn’t actually complete until everyone gets paid. The borrower can expect to receive funds within 24 hours of the closing.
If your client submits accurate information at the beginning of a transaction and complications are minimized throughout the process, Silver Hill can close and fund the small-balance commercial transaction in 30 days on average.
Of course, it’s natural for complications to arise during different stages of the small-balance commercial mortgage transaction process – that’s why it’s important to work with a team that has the experience needed to overcome challenges and get the job done.
To learn more about Silver Hill Funding’s core commercial mortgage solutions for small business owners and investors, visit our Programs page today.