“Hard money loans” – now more commonly called “Bridge Loans” are more expensive than institutional loans. One of the reasons that experienced real estate investors use them is that they can be funded much more quickly than bank or life company loans. If closing a loan quickly is important to you, check out these tips for making an application that will speed up your underwriting and your loan closing.

First, decide if you are going to use a “loan broker” to assist you with the application or will you apply to the lender yourself. Using a loan broker can be helpful. The broker may know the principals of the lender and may have placed other loans with them. They know what the lender needs to see and can give you a pre-application forecast of how the loan will be structured and what will the costs and interest rate. All these things may help to get

a quick close (if your loan broker is doing a good job). The obvious downside of using a loan broker is the cost. The broker typically will want to be paid a loan fee of .5-1% of the loan principal amount (or sometimes more).

You – as the actual borrower can apply directly to the lender and by following the suggestions below streamline your application and get the loan you need quickly. The most important element in a good loan application is for you to create a 1 page “loan summary” of

your loan request. In your 1- page summary clearly outline the following facts:

(1) What size loan do you want?

(2) What will be the real estate collateral for your loan? Property address – type of real estate (multi-family office-retail-single family-industrial, etc.)

(3) What is your current estimate of the value of your property? How did you arrive at your estimate – appraisal-broker opinion of value?

(4) Are you asking for a first mortgage loan or a second mortgage loan?

(5) What loan term works for you – 6 months – 1 year – 2 years?

(6) Is there a specific date that you must close this loan? For example – is this loan to finance a purchase and if so, when is the closing date. Is this loan needed to pay off an existing loan and if so when is the loan maturity date?

(7) Are you willing to personally guarantee the loan or are you requesting a “non-recourse”

loan without personal liability?

(8) Include a current personal financial statement with your home address and SS# for all the individuals who will provide a personal guarantee of the loan so the lender can run a credit report.

Montegra Capital has funded hundreds of loans over its 50 years as a Denver-based hard money lender and in all that time we have only received a few summaries which included all the above information. This type of loan request summary will make a positive impression with your prospective lender and cut the timeframe for underwriting your loan significantly. A clear loan request summary will mark you as a professional investor and create the presumption that

you will be a good borrower. Your lender will be favorably disposed to your request by getting initially what it normally takes them several days or longer to obtain.

Your lender will need some additional information, but let the lender give you a list of what they will need. It will include income and expense info on income properties – it may include a request for the personal tax returns of the loan guarantors – it will include a request for the operating agreement of the LLC if the property is titled in an LLC. It may include a request for an old or current title commitment – it may include a request for a property survey or a Phase I environmental report depending on the type of property. Your lender will send you a list of their additional requirements.

Hard money loans (with the right information provided as above) can close in as quickly as 1 week and almost never take longer than 3 to 4 weeks. Bank or life company loans can sometimes drag on for several months. When speed is important then following these suggestions can make all the difference.