What Happens in the Hard Money Approval Process?

One of the big benefits of using hard money is being able to close in 7-10 business days. However, what exactly happens during that period of time? It’s known as the “process” as there are a few steps to take to fund your deal.

Day 0

·      Initial call/email

·      Loan Application and driver’s license approved and on file

·      Preliminary terms request (our underwriting team receives it)

·      Underwriting team approves preliminary terms/title requested (includes survey). A survey is done to confirm land boundaries and a description of the property.

·      Preliminary terms sent to client

·      Preliminary terms signed and agreed upon/appraisal paid (the appraisal only paid upfront).

·      Negotiating terms and due diligence

Day 1

·      Appraisal ordered (to assess value of the property)

·      If renovation, an inspection is ordered. If new construction, there is a budget review.

Day 2

·      Budget review and approval process takes 1-2 business days

Day 3 - Day 4

·      Title commitment available (This provides the buyer and lender with terms and conditions about how the final title policy will be issued). Title insurance protects buyers and lenders from defects or errors with the title of a property.

Day 5

·      Appraisal and file review

Day 6 – Day 7

·      Final terms requested

Day 7

·      Underwriting team approves final terms requested

Day 7 – Day 8

·      Final terms signed (these are the terms agreed upon between the borrower and lender)

·      Loan documents ordered (specifying the loan)

Day 9

·      HUD settlement statement reconciled and approval. (The lender is confirming that the loan is approved for a particular property).

·      Funds identified – money wired to title company

Day 10

·      Closing (this occurs once the local government records the transfer of ownership in your property). Funding is usually the same date as the closing date. However, it can be one or a few days earlier.