The two biggest jobs of any broker are to find clients commercial mortgages that fit their needs, and to prepare the borrowers for the loan they can expect and the process of obtaining it. For brokers working with non-bankable borrowers, this means seeking out alternative commercial mortgage lenders, getting the information required to start the process, and selling borrowers on non-conforming loans.
Here’s how you can prepare your borrowers for alternative small-balance commercial mortgages:
Let them know what information they’ll need to provide
Most non-conforming commercial mortgage lenders require a 1003 or a commercial mortgage application, a recent credit report with scores and tradelines and a summary of the deal to begin evaluating a scenario. Make sure to discuss the requirement with you lender first so that you can give your borrower a complete list of the information and documents they’ll need to provide.
Explain the topics they should be prepared to discuss
Alternative lenders understand the challenges small-business owners face, but they’ll need your non-bankable borrowers to answer some questions in order to provide them with a small-balance commercial mortgage that fits their needs. Your borrower should be ready to talk about their credit report and any financial obstacles they’ve faced. They should also be prepared to discuss their property, their business, and how they’re managing their current financial obligations. The answers to these questions will help a lender determine whether your borrower qualifies for their programs and how they should structure the mortgage.
Prepare them for rate and terms they should expect
One of the most common obstacles brokers encounter when working with a non-bankable borrower is sticker shock. If your borrower is expecting a bank rate, selling them on a higher rate can be difficult. If you’re working with non-bankable borrowers, take the time to explain the rates and terms for which they’ll qualify. Keep them focused on their goals and tout the positives of the deal, like a fixed rate or a quick closing.
For brokers working with non-bankable borrowers seeking commercial financing, preparation is crucial. When your borrower understand the process, the type of loan for which they can qualify and what is expected of them to secure financing, it’s a much smoother process for everyone involved.