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Questions to Ask Commercial Borrowers Seeking to Refinance

If you’re a broker considering closing commercial mortgages, keep this in mind: There are always small business owners looking to refinance their properties. When you begin working as a commercial mortgage broker, these borrowers will make up a significant portion of your clients, so it’s important to know the questions you need to ask them in order to get a sense of the deal and get them the mortgage they need.

Here are some of the most important questions every broker should ask borrowers seeking a commercial refinance:

How is your credit?

Your borrower’s credit scores and overall history will be very important to any commercial lender considering their financing request. As a broker, you need to discuss this with your borrower to determine what kind of commercial mortgage for which they’re likely to qualify. Be prepared to talk with your lender about any past financial challenges your borrower has faced.

Tell me about your property.

For most lenders, your borrower’s commercial property is going to be a crucial factor in their decision, so it’s important to find out as much as you can about it. Where is the property located? How larger is it? What kind of building is it, and what kind of business operates from it? Is it owner-occupied or investment? These are all questions you need to ask your borrower about the collateral they are pledging before submitting the deal.

What do you need the money for?

There are a number of reasons a small business owner might be looking to refinance their property. Whether your borrower is looking to pay off another loan, invest in property improvements or take care of some tax liens, your lender will need to know in order to make sure that the deal makes sense. So, be sure to ask your borrower about the use of proceeds.

How much money do you need?

The loan amount that your borrower requires is another important piece of information. It can be difficult to get a smaller commercial mortgage from banks and other traditional funding sources, so brokers should develop relationships with small-balance commercial mortgage lenders so that they can provide borrowers with mortgage program options.

For brokers looking to close commercial mortgages, refinances will make up a good deal of your business, so it’s important to know which questions to ask your borrowers. To start, the lenders you work with will need information about your borrower’s credit, property, use of proceeds and loan amount. Getting this information early in the process will make things easier for everyone involved and will allow the mortgage to close quickly and smoothly.

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