The deeper you dive into real estate financing – the more familiar you become with the various methods (and their sometimes quirky names) used by lenders and investors to fund deals. Such is the case with table funding. Logistically speaking, table funding is a specific form of wet funding; when an investor closes on a loan and immediately assigns the loan over to the lender that provided the funds to close the loan.
At the time of the closing, the loan originator does not actually have the loan funds, instead relying on the lender/investor to provide the funds to close loans in the originator’s name. When the settlement takes place, the loan is assigned to the lender.
So, what are the advantages of table funding?
For brokers and lenders, this method plays a pivotal role in establishing an equitable playing field in the competitive marketplace of mortgage lending. For the firms that do not possess a large enough credit line or fund to handle loan pipelines, table funding creates an opportunity for them to enter the competitive local market as a lender, without the significant capital demands required to fund a large volume of loans.
Table funding allows brokers and lenders to have the look and feel of a direct lender without needing the capital to fund the loans they are originating.
If you’re ready to explore financing options to grow your originations as a table funder, contact TVC Funding today.