Key Stages Visio Tracks When Determining Turn Times
There are three key stages Visio tracks when measuring loan turn times, including:
- Appraisal Paid to Appraisal Received: this is the number of calendar days between when a customer pays for an appraisal and when Visio receives the appraisal. This time does not include any additional days required to make corrections to the appraisal. The most common delays during this stage are unavailability of appraisers and incomplete or incorrect appraisals.
- Sent to Processing to Closed: this is the number of calendar days between when a loan is assigned to a Visio Processor and the date the loan contractually closes. The most common delays during this stage are non-responsive customers/brokers, non-conforming hazard insurance, unreleased liens, other title issues and pay-offs.
- Closed to Funded: this is the number of calendar days between when a loan contractually closes and funding. Visio does not fund a loan until it confirms that all of the documentation has been correctly completed and signed. The most common delays are missed or incorrect signatures.
Why Might My Visio Loan Take Longer Than My Home Loan
A Visio investment property loan may take longer than your personal home loan for several reasons:
- Appraisal: some home loans, particularly refinances, don’t require a full appraisal by a licensed appraiser. This can save a week to 10 days. Visio focuses on financing investment property and underwrites the loan based on the property level cash-flow rather than your personal income. Visio requires an additional schedule to appraisals that includes the market rent for the property. Visio appraisals, therefore, take a bit longer than standard consumer mortgage appraisals.
- Title: investment properties tend to have more outstanding title issues that have to be resolved prior to closing a loan. That often takes time to coordinate and document.
- Insurance: insurance for investment properties is different from owner-occupied insurance. Most insurance agents and some customers are less familiar with how to insure an investment property. It unfortunately often takes quite a bit of time to get everyone on the same page with respect to the appropriate insurance for a rental property.
- Standardization and Tools: our government plays a large role in the consumer mortgage market. This has led to standardization and tool development. For example, Fannie Mae and Freddie Mac (controlled by our government) have an automated underwriting engine that is used by a majority of consumer mortgage lenders. A consumer mortgage lender can input your personal information into this system and the system will tell them whether you qualify and on what terms. There is far less standardization and automation in the market for investment property finance.
Why Might My Visio Loan Take Longer Than My Hard Money Loan
Hard money loans are designed for speed and flexibility, and they typically come with significantly higher fees and interest rates, lower advance rates and terms of less than three years. Hard money lenders most often are local to the subject property and rely heavily on their own knowledge of the property, property condition and location, rather than the knowledge of a licensed appraiser.
Given their geographic focus, these lenders also often work closely with a limited number of service providers, such as, title companies, insurance companies, attorneys and appraisers. This enables them to streamline their communications and respond rapidly to unexpected developments during the loan process.
Finally, most hard money lenders require little by way of income and credit documentation because they instead focus primarily on the value of the property relative to the loan amount. Despite the marketing pitches touting one-week closes, most hard money loans take 30 days or more to close.