You’ve submitted your borrower’s small-balance commercial mortgage request and a lender has approved the deal. The underwriting process has gone well, and the lender is ready to commit to the loan. Now all that remains before closing is successfully navigating the processing of the mortgage. Even if you work with lenders like APEX that handle of all the processing for you, it’s still important for you to understand the process. Here’s what needs to go smoothly for your borrower’s small commercial mortgage to close:
The appraisal will determine the value of your borrower’s property, and consequently the final loan amount. Your best bet is to let your lender order the appraisal and then step in as needed if there are any issues. It’s also important to be aware of the difference in cost between residential and commercial appraisals, and to prepare your borrower for this.
Title insurance provides protection to the borrower and the lender from any previous liens encumbering the property. Check with your lender to see who orders the title and when it should be ordered.
Be sure to work with your lender’s processing team to obtain the necessary documentation, such as pay offs or insurance information in order for your borrower’s mortgage to close without a hitch.
Certain property types, loan amounts and proximity to high-risk-use properties will determine the extent of environmental underwriting. Discuss this with your borrower and ask if they are aware of any environmental issues. Work with your lender if any issues arise.
In order to avoid problems at closing, it’s important to be on the same page as your lender throughout the processing stage. Be sure to discuss your lender’s policies on appraisals, title work, stips and environmentals and help as needed. It’s important to discuss this all with your borrower so that they are prepared for the process and to cooperate with the commercial mortgage lender in order to help your borrower obtain the financing they need.