How Long Does it Take to Get the Loan For most lenders they claim that the loan

How long does it take to get the loan for most

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How Long Does it Take to Get the Loan? For most lenders, they claim that the loan approval process should take about 30-45 days. However, experience dictates that most commercial mortgages take from 45 to 120 days to appraise the loan. However, this doesn’t mean that you won’t find exceptions. However, if you are on a timeline, it is critical to understand that the process can take longer than you expected. Cash Flow Factors
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As an investor, you should also understand other cash-flow factors that lenders consider when it comes to commercial real estate loans. 1. Loan-To-Value (LTV) Ratio Since commercial real estate loans don’t have private mortgage insurance, lenders usually use the property being bought as the collateral. Therefore, lenders largely depend on the loan-to- value ratio (LTV). This calculates the value of the loan against the appraised value of the property. Loan-To-Value (LTV) = Mortgage Amount (MA)/Appraised Property Value (APV) When the LTV is too high, lenders may not be willing to give you a loan as they view it as too risky. Typically, viable commercial real estate loans are those that have an LTV ratio ranging from 65-80%. Additionally, the LTV ratio is used by commercial lenders to determine the interest rate you’ll pay. 2. Debt-Service Coverage Ratio Another essential aspect that commercial lenders consider when offering commercial real estate loans is the debt-service coverage ratio (DSCR). To get this ratio, lenders divide the annual net operating income from a property by its annual mortgage debt service (principal and interest payments).
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  • Fall '09
  • Debt, Mortgage loan

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