For residential brokers looking to increase their income, adding small-balance commercial mortgages to your product offerings is a simple solution. With a little know-how and the right lending partner, these loans are easy to close.
Here’s how you can get started offering small-balance commercial mortgages:
Select the right lender.
One of the most important ways to ensure your success as a commercial mortgage broker is choosing the right lending partner. Be sure to select a small-balance lender with a variety of programs and a common-sense approach to underwriting each deal. Look for direct lenders with no upfront lender fees; this will benefit both you and your borrowers.
Understand your borrowers and their needs.
The type of commercial mortgage borrowers you decide to work with will determine the type of loan for which they can qualify. Make sure that you get to know your borrower so that you can give them an idea of the rate and terms that they can expect. The last thing you want to do is promise your borrower a bank rate when it’s not something they’ll be eligible for; it just means more work for you.
Make sure you still have time for residential clients.
If you’re a broker looking to close commercial mortgages for added income, it’s important to make sure that you can do so while still maintaining your residential business. Talk to lenders and ask them if they handle the processing, as this will save you time once the deal has been submitted.
Understand your income potential.
Be sure to discuss commission fees with potential lenders before submitting any deals. In order to maximize your earnings, look for lenders who offer yield spread. Make sure you’re not obligated to cover an application or appraisal fee.
Check your lender’s references.
Before you begin working with a lender, take the time to make sure that they’re a good fit. Determine if they are bank-owned or affiliated or if they’re an independent lender. Talk to brokers who have worked with them and ask questions about the experiences they’ve had.
Residential brokers can earn more with ease by adding small-balance commercial mortgages to the products they offer to borrowers. With the right lender, an understanding of your borrowers’ needs and the necessary time management skills, it’s easy to close these loans and increase your income.