Once your borrower’s commercial loan request has been approved, all that remains before closing is successfully navigating the processing of the mortgage. At APEX, we take care of processing your borrowers’ loans, but some lenders need the broker to be more involved. Whether you work with a lender who handles all of the processing or not, you should understand what happens between commitment and closing.
Here’s what needs to go smoothly for your borrower’s commercial mortgage to close, and for you to earn your commission:
The appraisal will determine the value of your borrower’s property, and consequently the final loan amount. Your best bet is to let your lender order the appraisal and then step in as needed if there are any issues. It’s also important to be aware of the difference in cost between residential and commercial appraisals, and to prepare your borrower for this.
Title insurance provides protection to the borrower and the lender from any previous liens encumbering the property. Check with your lender to see who orders the title and when it should be ordered.
Be sure to work with your lender’s processing team to obtain the necessary documentation, such as pay offs or insurance information. Without this documentation, your borrower’s commercial mortgage will not be able to close.
Certain property types, loan amounts and proximity to high-risk-use properties will determine the extent of environmental underwriting. Some properties, such as auto repair shops and warehouse, will nearly always require an environmental report. It’s important to work with your lender if any issues arise as a result of the report.
In order to avoid problems at closing, it’s important to be on the same page as your lender throughout the processing stage. Be sure to discuss your lender’s policies on appraisals, title work, stips and environmental reports and help as needed. Understanding how the lenders you work with handle the processing phase of the loan will make it easier to close your loans, get your borrower’s the funds they need and earn your commission.