There are endless articles and how-to’s to guide you through obtaining a small business loan for your real estate business. Checklists and professionals are in abundance to help you fill out the application perfectly. However, there are a few questions that may pop up in your application interview process that many are unaware and unprepared for. While these series of questions may not be asked by every loan officer, being prepared for them ahead of time will not only help your case, but provide you an even more stable foundation for your real estate venture.
- How do you anticipate your personal income to fluctuate in the next five years? This will help a loan officer determine what type of loan you are best suited for and what to award you with. Would you be better off with a fixed or variable interest rate? All of these questions can be answered by understanding your own personal income habits and instances. Additionally, if you are aware of any other personal expenses that may come your way (i.e., a baby, college tuition, etc.), this would be a good time to factor that all in.
- What do you need from a loan officer? Are you looking for someone with clear communication habits? Are you in a rush and want to get the process completed quickly? Having the right loan officer, based on your wants and needs, can be vital in the loan process.
- Do you prefer phone, email, fax, or in person communication? While this may seem like a silly question, it is important to streamline your loan process as much as possible. Are you someone who is always on the go and rely on your phone for knowing what is happening? Phone calls or emails may be your best bet. Are you always finding yourself in the office, day and night? Faxing may be the fastest way to immediately get your attention. Either way, make sure it works for you and your schedule.
- How do you financially carry yourself? Are you a spender or a saver? Regardless of your philosophy on money and finances, you want to make sure you’re finding the lowest interest rates possible. However, based on how you manage your finances, you could find yourself deciding between a long term fixed rate vs. or an ARM loan.
- How will you be handling closing costs? There will come a time when you’ll need to decide if your closing costs will become a part of your loan or paid from your own pocket. When your closing costs are incorporated into your loan, you may be looking at a higher interest rate. However, if you don’t have the cash to pay for the costs immediately, this also may be a better option.
Utilize these tips to help you find a better balance when you are looking for a real estate loan and handling a loan officer. For more tips on real estate ventures, check out our other articles posted weekly!