Processing

Once you have assembled all the documents needed by the lender, the evaluation process begins. New questions might arise, requiring additional documentation and answers.

Throughout the processing of your loan, the lender will:

• Evaluate and verify your business’ income and assets;
• Review the business’ credit history to determine how well you have paid your debts in the past;
• Order an appraisal to determine if the value of the property is consistent with what you have agreed to pay; and
• Determine the feasibility of the project.

All of this information will help the lender determine how large a mortgage loan to give you. You and the lender will discuss the type of mortgage that best fits your needs and abilities. Once your application has been approved, the lender will send you a Commitment Letter outlining all terms and conditions of the loan and the items you will need for closing. You will be asked to sign and return the agreement showing that you are ready for the closing of the loan.

Next, the lender will begin preparing the documents for your closing. This involves coordinating title work, inspections, settlement figures and other documents. 

Whether your business is purchasing a commercial or residential property, the lender will acquire title insurance. This policy protects the lender from loss if an unforeseen claim comes up against the property, such as a secondary mortgage or liens by government agencies. You might also want to purchase this type of insurance to protect your investment.  During processing, a title company will search the title to make sure that no one else has a stake in the ownership of the property.

Before your closing, the lender will require you to purchase hazard insurance, which covers you and the lender in the event that a storm or fire damages and/or destroys the property. Many options are available, so make sure your coverage meets the lender's requirements.