How much time does it take to underwrite a commercial real estate loan?

When seeking capital financing, it’s crucial for you to understand the process of commercial real estate loan underwriting. This is usually a detailed process that takes between five to eight business days depending on the borrower.

What is Loan Underwriting?

Commercial real estate loan underwriting is the process by which the commercial lender examines the eligibility of the borrower. The underwriter is usually looking to ensure that the potential borrower meets their guidelines in terms of collateral, credit, debt and income in addition to other secondary guidelines as stipulated by the terms of the loan.

What Is Involved In The Process Of Underwriting?

During the underwriting process, the lender will assess all the paperwork that are part of the requirement of the loan including bank statements, tax returns, income situation, debt-to-income ratio and others. The aim of this is to ensure that the borrower adheres by tall the requirements that have been set by the financier, the secondary mortgage market and the federal government.

How Long Does The Process Of Underwriting Take?

How fast the process of underwriting is completed largely depends on the type of commercial real estate loan that you’re seeking and the specific lender.  Conventional lenders have to abide by third party requirements and regulations in addition to their own internal guidelines. Alternative lenders like hard-money lenders and internet private company lenders also have their guidelines and secondary requirements that they will expect from your application.

How to Speed Up the Underwriting Process

Although the underwriter will make the ultimate decision concerning the approval of your loan, there are certain things you can do to make the process faster and smoother.

  1. Maintain a good credit score both for your business and personal – Many underwriters will thoroughly scrutinize your credit score, it’s therefore important to not only maintain a good credit score but also ensure that your credit history and report are up to date.
  2. Corporate with the underwriter – although the process of underwriting can be intimidating, you should be prompt at filling out the application process and availing supporting documents.