When working with small commercial mortgage loans, it’s important to manage your time wisely, be up front with your lenders and borrowers, and properly prepare your borrowers for the lending process. It all comes down to having a few open and honest conversations with your lender and your client. Following the advice below will help you to avoid wasting too much time on deals that simply won’t work.
- Give your lender all of the information about the deal upfront – especially the hairy details. It’s important to be honest with a lender about the deals you send, particularly if you know there’s an aspect of the deal that could be considered problematic. If there’s an issue with the borrower or the property, the lender will find it. It’s better to disclose all the facts from the start, since withholding information is generally harmful in the long run and has the potential to kill the deal.
- Prepare your borrower to speak with the lender if necessary. Some small commercial lenders will want to conduct a borrower interview to go over the information they have to ensure it’s correct and to ask any final questions they might have about the loan request. Make sure that your borrower is prepared to go through their financial information with the underwriter, and that they are ready to answer any questions.
- Prepare your borrower for the product they’ll be getting. As a broker, you should be honest with your borrower about the product they’ll be receiving based on the lenders you choose to work with. If you’re dealing with a borrower with great credit and a solid financial situation, it’s fine to tell them that they’re likely to get a good rate and terms. However, if your borrower has less than stellar credit or other issues that would qualify them as non-bankable, you should prepare them to expect higher rates.
It’s important for you as a broker to aid your lenders in collecting information and to aid your borrowers in preparing for the lending process. Obtaining financing for your clients will be a much smoother undertaking if you provide the lender will all of the relevant facts and educate your clients about what they need to do and the product they’ll be receiving. If everyone is on the same page from the start, it’s less likely that valuable time and resources will be lost.