Many commercial mortgage brokers come across the occasional borrower who cannot obtain traditional financing. If this is the case, the broker generally needs to turn to a non-conforming or private lender to help their clients meet their financing needs. However, before you begin doing business with one of these commercial lenders, there are some questions you need to ask first.
- How much are you willing to lend? Before you submit any loan scenarios to a non-conforming commercial mortgage lender, you need to know the amount of money they are able to loan your borrowers. It’s important to have working relationships with both small balance and large balance non-conforming commercial lenders so that you can meet as many of your clients’ needs as possible.
- How long have you been in business? You’ll want to make sure that any of the lending partners you choose has a good amount of experience in the commercial mortgage industry. An experienced non-conforming lender will be better suited to helping your borrowers obtain the commercial mortgages they need.
- What kinds of rates and terms can my borrowers expect? Once you’ve established a lenders loan sizes, you should ask them about their rates and terms. This information is important to procure before you try to sell a deal to your non-bankable borrowers because you don’t want to promise rates and terms that just aren’t possible.
- How quickly will the loans close? Many borrowers turn to non-conforming lenders when they can’t afford to wait for a bank loan. Be sure that the lenders you work with underwrite each deal thoroughly while still closing in a reasonable amount of time.
- How do you protect your brokers? You’ll want to make sure that the non-conforming commercial lenders you work with offer their brokers some sort of fee protection before you get started. Ask how much you are able to make on each mortgage you close and how the lender will work with you to make sure you are paid.
It’s very important to get to know a non-conforming commercial lender before you begin working with them. These five simple questions will help you to gain a better understanding of what you can expect from a lender and what they will expect from you.