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Refinancing to Pay Off a Ballooning Commercial Mortgage

It’s not uncommon for small business owners to face a ballooning commercial mortgage. In these situations, borrowers have a limited amount of time to obtain the necessary funds to pay off the mortgage. Because of this, many borrowers turn to brokers in order to get the money they need quickly.

If you’re a broker working with a borrower who needs to pay off a ballooning commercial mortgage, here’s what you need to know to get started:

Loan amount:

One of the first things you need to find out is how much money your borrower requires in order to pay off their ballooning commercial mortgage. This will help you to determine where to send the financing request. Get a payoff statement from their current lender and include it when you submit the deal.

Credit:

Another major factor in any commercial mortgage request is your borrower’s credit history. You’ll need to acquire a recent tri-merge credit report that includes scores and trade lines. Your borrower’s credit scores and history will play a major role in the type of commercial mortgage for which they’ll qualify.

Collateral:

In order to refinance your borrower’s property, a commercial lender will need information about the building your borrower is pledging as collateral. Be sure to include the property type, location and size in your original submission. Let the lender know what type of business is operating from the building. If your borrower has tenants, provide a rent roll.

Additional use of funds, if applicable:

If your borrower is looking for money in addition to the payoff of the ballooning mortgage, include their plans for it in the loan submission summary.

Proof of capacity to pay:

Any commercial mortgage lender is going to need to make sure that a borrower is able to repay the loan, so include any relevant financial information that proves their capacity to pay when you submit the deal.

Having all of the above information at the time of submission will speed up the process of getting your borrower the funds they need to pay off a ballooning commercial mortgage. Additionally, it’s a great idea to speak with lenders and make sure that you have all of the necessary information and documentation they’ll require for a commercial mortgage request. By collecting these details early on in the process, you’ll make things much easier for yourself, your borrower and your lender.

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