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Educational articles for Commercial Mortgage Brokers

Commercial Mortgage Theater: The Three Acts of Closing a Commercial Loan

All the world’s a stage, and the commercial mortgage industry is no exception. When you’re playing the role of commercial mortgage broker, it’s important to understand what’s expected of you before you submit a deal, as well as how the lending process works. Much like a standard play, the commercial mortgage lending process can be divided into three distinct acts. Here’s what you need to do once you’ve entered the stage of commercial mortgage lending:

  • Act 1- The Submission:

    The first thing you’ll need to do is submit your loan scenario to a small-balance commercial lender. Speak with your lender and see what documents they require to get the lending process started. You’ll likely need to send an executive summary of the deal, an application and a recent credit report along with any other information the lender deems necessary. If you are not already signed up, become an APEX approved commercial mortgage broker today!

  • Act 2- Underwriting and Selling:

    Once your lender has all of the documentation they need, they’ll begin the underwriting process. Be ready to send along any other information the lender needs throughout the process, as this will allow them to set the terms more quickly. Once your lender makes an offer, it’s your job to sell the loan. If your borrower isn’t bankable and was expecting bank rates, this can be tough. However, if you keep your borrower focused on their goals and the positives of a nonconforming loan, you’ll be able to close. Read more about working with non-bankable borrowers.

  • Act 3- Processing and Closing:

    Once your borrower has accepted the terms of the deal, processing begins. It’s a great idea to develop relationships with lenders who handle ordering the appraisal and title and the general ins and outs of processing, as this gives you more time to seek out new business. Be available to help, though, should problems arise at this stage of the lending process. As long as you’re willing to help the borrower and the lender, processing and closing should go smoothly.

A good stage production is a well-oiled machine that takes time and practice to perfect. The same can be said about working as a commercial mortgage broker. Once you’ve developed the necessary skills and understand what you need to do to submit and close small-balance commercial loans, though, you’ll be able to increase your business as well as your income.

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