Ensure a Smooth Refinance: Tips for Quick Loan Closings

A quick, smooth loan closing begins before you reach out to a lender.  It’s made possible by understanding the type of documentation lenders look for, and when, and in which format, they need to receive it.   

The type of property being financed will influence key documents; however, the following are items that are consistent across all properties.

• Property Financials and Rent Roll – Microsoft Excel operating statements and rent rolls reduce the time your lender needs to evaluate your loan as they are able to import the information into underwriting / financial models instead of typing in all the information.
• Competitive Market Studies – Lenders spend substantial time identifying comparable properties within the immediate area and decisions on identifying comparable properties may impact potential proceeds and loan pricing. The more information you can share on the immediate area, comparable properties in the immediate area, and recent sales in the market will help in providing support in providing you the best rate and requested loan proceeds. 
• Property Insurance Certificates – Property insurance has been a hot topic in recent years as insurance companies have stopped providing insurance in certain regions of the country and/or limited coverages available in certain regions while also substantially raising their premiums.  We highly suggest requesting insurance requirements prior to signing your loan application and/or providing your insurance certificates so they can be reviewed early in the refinance process.
• Organizational Chart – Borrower credit items will vary for the type of financing you are seeking; however, providing an organizational chart and disclosing adverse credit history will eliminate time and stress as you work through the loan closing with your lender.  In providing the Org Chart upfront, we can quickly identify the entities and individuals that will require borrower credit diligence and credit searches.  Some jurisdictions take time to provide searches and can delay closings if not acted on quickly.
• Legal Contract Abstracts – Throughout the closing process, lenders will review all legal contracts, which will vary from commercial leases, service contracts, management agreements, franchise agreements, PIPs, construction management agreements, etc.  Providing lenders with documentation that summarizes and highlights any major terms (non-defaulted termination options, co-tenancy options, key financial terms, key dates, and other critical elements of the contractual agreements), allows for a quicker response in the sizing and limit surprises in the closing process.
• Estoppels – Estoppels will be needed to confirm no changes have been made to contractual commercial leases since leases were executed and/or modified. We find that starting this process immediately following a signed loan application is important as some tenants take considerable time reviewing and signing the estoppel form. 
• Third Party Report(s) Requested Documentation – Appraisers, property engineers, and environmental consultants will be reaching out shortly after your loan application is signed and they will have specific documents that they will need to complete their reports for the lender.  Understanding the information that will be requested and forwarding this information promptly to the appropriate group will assist them in meeting their deadlines. 

As processes may differ from one product offering to the next, there are common elements across these lending platforms.  Throughout my career, I have advised and/or handled the closing processes for equity funds, regional and community banks, international banks, CMBS lenders, GSE’s, life companies, and nonbank lenders. 

Our team at Plum takes great pride in providing certainty of execution and white glove service throughout the refinance process.  We work closely with our customers to prioritize the key documents that require more time to review and process. This results in our team exceeding client expectations with our closing process.  Here’s what our borrowers tell us about their experience: 

“Plum did a great job of keeping us informed of the significant documentation that was needed to close the loan. A weekly all hands-on deck meeting kept us moving toward the contractual closing date. Closing the loan on time was critical because of the current volatility in interest rates. The documentation required was fair and not overly burdensome.”

– Owner of Student Housing Property in North Carolina