Brokers closing small-balance commercial mortgages for non-bankable borrowers are no strangers to deals where time is of the essence. In these cases, it’s crucial to make sure that the deal closes as quickly as possible so that your borrower is able to obtain the mortgage they need.
Here’s how you can avoid delays throughout the lending process:
Prepare your borrower.
Most non-bankable borrowers feel their mortgage’s interest rate should be the same as what the bank offers. Whether it’s poor credit or property type that knocks them off a bank’s lending grid, it is their broker’s job to prepare them for what to expect.
Submit the right documents.
In order to ensure that the underwriting process begins smoothly, it’s important to send your commercial mortgage lender the correct documents. Make sure you discuss what your lender will need to begin evaluating your borrower’s commercial financing request. Generally, the basic documents you will always need to submit are a completed 1003 or application, a credit report that includes scores and trade lines, a summary of the deal and photos of the property.
Answer questions promptly.
If your lender’s underwriting team contacts you with questions about the deal, be sure to answer them as quickly as possible. Make sure that your borrower understands that the sooner the lender has the information they need, the sooner they’ll be able to secure the funds they need.
Work with the lender to solve problems.
It’s not uncommon to run into obstacles when working to close a small-balance commercial mortgage, especially if your borrower isn’t bankable. If this is the case, it’s important to cooperate with your lender in order to resolve these issues. Encourage your borrower to be as open and honest as possible about potential problems, as this leads to quicker solutions.
Sell the deal’s strengths.
Sometimes, it can be tough to sell a small-balance commercial mortgage to a non-bankable borrower. In these cases, it’s important to point out all the positives about the deal and keep your borrower’s eye on the prize. Whether it’s a better-than-expected rate, fixed and fully-amortized terms or reasonable closing costs, be sure to sell the deal’s strengths.
A quick closing is often one of the reasons brokers and borrowers choose small-balance commercial lenders. Because they don’t face the same regulations as traditional lenders, these companies can close loans fast. However, it’s important for brokers to do what they can to assist. Following the above tips will allow your lender to get the deal done fast and will get you your commission check that much sooner.