In order to close more commercial mortgages and increase your income, you need to do business with the right lenders. If you’re a residential broker looking to begin closing commercial loans or a commercial broker looking to expand your business, it’s important to find lenders that fit your needs and your borrowers’ needs. Here are some factors every broker should take into account when choosing a commercial mortgage lender:
- Experience in the Industry: How long has this lender been actively lending in the industry? Are they a flash in the pan business or are they an established, professional lending institution? It’s important for you to place your client with a reputable lender. After all, your client will be associated with this mortgage long after this deal has closed. Be sure you leave them in good hands.
- Product and pricing: When you begin your search for commercial lenders to work with, the first thing you should do is familiarize yourself with their products and pricing. In order to find the right commercial lenders for your business, you’ll need to know your niche and your borrowers. Review the websites of lenders you’re interested in doing business with and call them with any questions.
- Communication and service: In order to keep track of a loan’s progress and keep your borrowers informed, you need a lender who prioritizes both communication and service. Ask each lender what their process is from loan application to closing and their policy on updating brokers as the mortgage request progresses. Inquire as to how much of the processing the lender provides for your application, such as ordering third party services and clearing title issues. This will paint the picture of how much of your time will be spent working the file.
- Clear and consistent underwriting: Working with lenders who have a consistent set of standards to underwrite each loan is very important, particularly if you work with traditional lenders. If you work with non-conforming lenders, be sure that their approach to underwriting is both thorough and flexible.
- It’s Closing Time!: How quickly will your application close? Ask the lender what their average turn-around time. If your borrower needs their funds quickly, do not disappoint by choosing an inexperienced lender that cannot meet your deadlines.
It’s important to remember that not every lender will be right for you. As a broker, you need to determine which commercial lenders are the best fit for the type of business you do. In order to make a decision, be sure to discuss about the lender’s experience in the business, their product and pricing, their communication and service policies, their underwriting methods, and their average closing time. Once you know all of this, you’ll have the information you need to decide whether or not to work with a particular commercial lender.