If you’re a commercial mortgage broker, chances are you come across non-bankable borrowers who are looking to purchase mixed-use buildings or who would like to refinance their properties and make some improvements or pay some bills. A loan with a small commercial mortgage lender can help your borrower achieve his or her financing goals. There is some basic information you’ll need to provide your small commercial mortgage lender, which you and your borrower will need to be prepared to discuss.
- Credit score and credit report: Your borrower’s credit score and credit report are two of the most important tools a lender will use to decide whether or not to finance your borrower’s request. Because the borrower’s credit is so crucial to the process, it’s important for you and your borrower to know and understand it. When pulling your borrower’s credit, be sure it’s as recent as possible, so that the lender has up-to-date information when evaluating the loan scenario. Make sure your borrower is prepared to discuss any financial “bumps” that appear on the report, like bankruptcies or account delinquencies.
- Ability to pay: Any small commercial mortgage lender is going to want to make sure that a borrower has the ability to make monthly payments. To give a lender an idea of your borrower’s capacity to pay, be sure to provide relevant financial information about the mixed-use property. Having your borrower complete a 1003 or a personal financial statement will provide a lender with the information they need to evaluate your borrower’s situation. If your borrower rents any of the units, be sure to include leases and an income and expense report.
- The property: Make sure you know the facts about the building your borrower is pledging as collateral. How big is the mixed-use property? What kind of business is your borrower going to run? Is your borrower going to rent out the commercial or residential space? All of this information will help your lender to assess your borrower’s circumstances.
- Use of funds: A small commercial mortgage lender will want to know how your borrower plans to use the funds. Whether it’s purchasing a mixed-use property to start his or her own business and rent to tenants, or refinancing a mortgage to improve an existing business, the more information you and your borrower give the small commercial mortgage lender, the easier it will be to obtain a commercial mortgage.
Providing a small commercial mortgage lender with the information above is crucial to securing your borrower a mixed-use commercial mortgage. If you and your borrower are able to discuss the credit score, capacity to pay, property information and use of funds with the lender, your borrower stands a better chance of obtaining the small commercial mortgage they need.
If you are a commercial mortgage broker and would like to discuss a mixed-use loan scenario, please call APEX Mortgage Corp. at 800-262-2739.