If you’re a residential or commercial mortgage broker looking to increase your business and your income, working with non-bankable borrowers is a great place to start. For these borrowers, non-bank commercial mortgage lenders will obviously be your best bet. These lenders are a great resource and can help you close deals for borrowers who have faced financial challenges in the past or simply need to get financing fast.
Here are the pros to working with non-bank commercial mortgage lenders:
A simple application process
Banks and other traditional lenders generally require a lot of documentation to begin reviewing and underwriting a commercial mortgage request. Non-bank commercial lenders, however, don’t usually need much to evaluate a scenario. Often, all you need to do is send over a completed 1003 or commercial mortgage application, a recent credit report that includes scores and tradelines, a summary of the deal and some photos of the property your borrower is pledging as collateral.
Because non-bank commercial mortgage lenders aren’t as heavily regulated as banks, their underwriting guidelines are generally more flexible. This means that non-bank lenders can work with borrowers who are recovering from credit issues, need to pay off back taxes or are facing other challenges that banks aren’t able to solve because of the regulations.
A commercial mortgage from a bank can take months to close, so if your borrower needs financing quickly, a bank loan might not be the right choice. Because of fewer regulations and a more streamlined process that involves less documentation, non-bank commercial mortgage lenders can close a deal in as little as a few weeks from commitment. This will be a plus in situations where time is of the essence.
The ability to earn more
Banks and other traditional lenders generally cap the fees that brokers can charge at a fairly low percentage. Non-bank lenders, however, often allow brokers to charge quite a bit more. For example, at APEX, we want our brokers to earn the appropriate commission for each deal, so we allow brokers to charge up to 5 points up front and offer up to 2 YSP on most deals.
Brokers looking to earn more need look no further than developing partnerships with alternative lenders. Whether your borrower has dealt with credit issues in the past, is looking to pay off back taxes, faces income verification issues or simply needs a mortgage fast, non-bank commercial mortgage lenders can help.