For residential mortgage brokers looking to increase their income and expand their business, the small-balance commercial mortgage niche offers plenty of opportunity. This underserved market is full of borrowers who will benefit from your expertise. Of course, if you’re new to commercial mortgages, you probably have some questions.
Here’s some basic information to get you started:
What is a small-balance commercial mortgage?
This is a loan under $1 million that is secured by a piece of commercial property.
Who needs this type of financing?
Small business owners, particularly those who don’t qualify for a bank loan, are often the borrowers you’ll be working with if you choose to close small-balance commercial mortgages. Typically, these borrowers have less-than-stellar credit, income verification issues or past tax debt that precludes them from obtaining traditional financing.
Where can I find commercial mortgage leads?
The same referral sources that refer residential borrowers to you will likely also be a great resource for commercial mortgage leads. Talk to the bankers, accountants, realtors and attorneys with whom you already do business and let them know you can get their clients the commercial financing they need. You can also visit small business owners in your area and discuss how you can be of service if they’re in need of a mortgage.
What does a commercial mortgage broker do?
As a commercial broker, you’ll be using the skills you acquired as a residential broker and applying them to this niche. You’ll make connections with lenders and help borrowers to determine which lender is the best fit. You’ll collect and submit all of your borrower’s information and work with the lender to craft the best possible deal for the borrower. You’ll answer your borrower’s questions and use your knowledge and skills to secure them the financing they need.
Residential brokers looking to earn more and increase their business would do well to consider closing small-balance commercial mortgages. This is a simple way to use skills you already have in place to expand your customer base and increase your income.