All loans are secured exclusively by first mortgages, with a low loan-to-value on each property. The management meets with each potential borrower at the property after an application is received, income and credit are verified and all other aspects of prudent lending are completed, which includes bank statements, tax returns and appraisals. At that time a decision is made and the customer is explained the terms and conditions of the approval.
The interest rates range between 12% to 18%, depending upon the qualifications of the borrower and timeframe of the loan. In addition, origination fees and processing fees are incorporated into the gross loan.
Most applicants are seeking either refinancing or purchases and have the ability, the capacity and the credit, to qualify for a conventional first mortgage, but cannot secure funding from a traditional lending institution at particular banks. Tower Financial also caters to smaller commercial loans, ranging between $50,000 to $250,000, an underserved market. Tower Financial invests the time and effort required to grant these loans due to their low overhead and efficient cost structure.
All loans are then closed by our General Counsel with all State and Federal approved loan documents, surveys, full title search and title policy insuring that the property is free and clear from all encumbrances. Our principal business objective is to continue investing in profitable short-term bridge loans secured by a first mortgage on commercial real estate, while actively managing our current portfolio, and maximizing the return.
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