Pre-approval itself is usually available within 24 to 48 hours of a completed application, without a credit pull.
Alex is realistic about the current market, which he reads currently as favoring buyers: a seller with an interested party is inclined to accommodate them. But markets turn, and a commitment letter also has a second use. When a closing is delayed for reasons outside the buyer’s control, a lender’s written commitment reassures the seller that the buyer is serious and that the delay is procedural.
Choosing a Loan
As a commercial lender, Hall and Hall can tailor almost any structure, and Alex’s daily rate sheet carries thirty to forty products with many more available. In practice, most borrowers choose one of four.
- A three-year or five-year fixed rate on a twenty to thirty-year amortization. These are the least expensive products and some of the most popular.
- A twenty-year or thirty-year fully fixed rate, where the rate never changes. These are the most expensive products and the next most popular.
- A variable rate tied to the Wall Street Journal prime rate, which can reprice monthly and can be swapped into a fixed product at no cost when the borrower chooses.
Who picks which is predictable, and Alex finds it says something about how people think about money.
“Choosing a loan product depends on how much perceived risk you’re willing to take on. A person with a more fixed income type of lifestyle might choose stability over perceived volatility and elect a long-term, fully fixed-rate loan product, while someone willing to take on a little more risk might choose an adjustable-rate loan product to save on interest costs.” – Alex Leamon, Hall and Hall
Two features apply across the board. Hall and Hall’s loans carry no prepayment penalty. And the variable product exists partly so that borrowers who expect rates to fall can wait, then lock in a longer fixed term later without paying to do so.
“We can book the loan tomorrow and you can pay us off the day after. No penalty.” – Alex Leamon, Hall and Hall
What the Lender Needs
Alex will look at a listing with a buyer on the first call and say whether it qualifies. If the search changes materially, another conversation is needed.
The rest is the standard document set covered in Hall and Hall’s guide to ranch loan requirements: tax returns, financial statements and a personal balance sheet, ready to send.
Why Alex Does This
What Alex enjoys about the work is not the loan.
