Small-balance commercial mortgages are a great opportunity for brokers to close more loans and earn additional income. However, if you’re unsure of how to go about it, closing these loans can seem like a challenge. Once you know how to proceed, though, getting these deals done is very simple.
Here’s what you need to do to successfully close commercial mortgages:
1. Talk to your lender
Before you submit a small-balance commercial mortgage request, you should have a quick chat with your lender to determine what documentation they’ll need to review the scenario. Having as much information upfront as possible will lead to a quicker evaluation of your borrower’s situation and a faster yes or no.
2. Get your borrower’s application in order
Once you know what your lender will need, it’s time to put your borrower’s application together. In most cases, you’ll need, at least, a completed 1003 or commercial mortgage application, a credit report with scores and trade lines, a summary of the deal, and recent photos of the property for the initial review of the deal. Other documents you might need to provide depending on the property or the use of funds include rent rolls and agreements of sale. Again, the more information you provide from the beginning, the simpler the loan process will be.
3. Collect any additional information your lender needs
This step is simple. After the initial review, your lender will likely ask for more information and other documents. All you need to do is obtain these from your borrower as quickly as possible.
4. Answer questions promptly
Once the deal has been review and underwritten, it’ll move to the processing stage. There’s a good chance your lender will have more questions, so be ready to follow up with your borrower to get the lender the answers they need fast.
How quickly a commercial mortgage closes often depends on the broker. To get these deals done, you need to communicate with your lender, provide the documentation they need to review the deal, and answer any and all questions as promptly as you can. Taking the time to get your lender what they need is the best way to ensure the commercial lending process goes smoothly.