Time is money. Investors need to be able to move quickly, not just to get the best deals, but to start making money sooner, too. The process of financing an investment property can often be a time (and money) drain. Here are our tips to ensure your loan closes fast.
1. Property Value
Talk to your local realtor and do your own research to determine the appropriate comparable. Appraisals provide us with helpful indications of value, but we also rely heavily on our own research and analysis. Please let us know if you’ve made improvements to the home, detailing what has been done and the amounts invested.
2. Property Condition
Appraisers rate property condition using a scale of C1 (New) to C6 (Complete Redevelopment). We only lend on rent ready properties (C1-C4). ALL repairs/rehab should be completed PRIOR to starting a loan with Visio. While we sometimes finance properties requiring some minor redevelopment, we make these decisions on a case-by-case basis. If you are concerned that your property may need too much work to qualify, send us some current pictures before ordering the appraisal.
3. Recent Transactions
If the home has changed hands in rapid succession with significant increases in value, we need to know ahead of time. We need to understand the reasons behind the increase in value before making the loan. Finding out late in the transaction almost always causes problems.
4. Non-Arms Length Transactions
A non-arms length transaction is where the buyer and seller have a pre-existing business, personal or familial relationship. We will make these loans, but we want to know up front. Visio is not a consumer mortgage lender, and therefore cannot allow family of the borrower to remain in the property.
5. Fees
Our Account Executives will provide you with a detailed fee worksheet showing all our fees well in advance of closing. Please read it. It’s not in anyone’s interests to have a deal fall apart at the closing table over fees.
6. Title
If you are refinancing with us, please give careful thought to any liens, judgments or delinquent property taxes on the property. These will come up during the title phase, and they not only take time to clean-up but could also result in disqualification. If you’re buying a property, we require a clean title to close. Items such as releases of old mortgages or the existence of ground rents/land lease, which is common in some areas (MD), can take substantial time and effort to address.
7. Borrower Name
If you’re refinancing with us, please consider whether there is anyone else on the title with you. That person will need to be available to sign documents. In addition, we will title the property the way it comes to us. If you're attempting to remove anyone from or add anyone to title, please resolve this prior to starting a loan with Visio (see "Borrowing in an Entity" below for exceptions). For purchases, if you are buying from a government agency, such as HUD, execute the purchase contract in the exact name in which you intend to hold title. They are not very flexible about changing names mid-transaction
8. Investor Insurance
Research and choose your insurance product EARLY. It likely will take longer than you think. Consider the cost as well. If your premium is proven to be more expensive than you are estimating, it could potentially change your loan parameters, up to and including disqualification. Accurate escrow estimation is paramount to an accurate quote from Visio. Please note, we require hazard insurance to have 100% replacement cost. We do not allow actual cash value policies.
9. Borrowing in an Entity
We lend to entities, such as corporations, LLCs and partnerships. Please make sure your entity is fully established and is in good standing. We’ll need all the documents to complete your loan. If you're attempting to change the titled entity, we can accommodate if the ownership interest is identical between both entities. (See "Borrower Name" above.) We do NOT lend to trusts nor non-profit corporations.
10. Sense of Urgency
Time is always of the essence. It is important to thoroughly read emails and respond to communication from your account executive and processor. We’re always available to help and provide clarification to ensure a smooth transaction.
