As a commercial mortgage broker, you need to talk to your borrowers. It’s as simple as that. Collecting the documentation that a commercial lender will need to evaluate a loan scenario is important, but so is developing a solid understanding of your borrower’s situation and commercial mortgage needs. Here are several important items that you need to discuss with commercial borrowers before beginning the process of finding them financing, to make sure your borrower has realistic expectations for the mortgage process:
There are many different sources of capital and many different programs.
When a borrower approaches you to help them obtain a commercial mortgage, it’s important to educate them about their options. Let your borrower know that there are a number of financing possibilities and that, as their mortgage broker, you will find them the right fit.
You set your own rate.
Often, the first thing your borrower will want to discuss is rate. As their broker, it’s important to be honest with them and let your borrower know that they set their own rate. Commercial mortgage rates can be affected by your borrower’s credit, property type, cash flow and a number of other factors. Explain that their unique situation will determine their rate.
Money remains difficult to obtain.
Despite the gains our economy has made, the commercial lending environment remains tight. Banks and private lenders are lending more now, but they remain cautious. This means that your borrower may need to compromise to meet their financing goals.
When working to find your borrower the financing solution they need, you should discuss the above items with them. You need to let them know what their options are, what will determine their rate, and that a commercial mortgage can be difficult to obtain. By having an open and honest dialogue with your borrower, the borrower will get a better, more realistic, sense of what to expect in the mortgage process. Additonally, you’ll also benefit by gaining a much better understanding of their commercial mortgage needs, enabling you to help them find the financing solution that best fits their needs.