Closing small-balance commercial mortgages shouldn’t strike fear into your heart; you just need to know how to choose a reliable lender. Selecting the right lender is a crucial decision for any broker, and it’s important to be able to spot the lenders who will make closing these loans more difficult.
In the spirit of Halloween, here are the lenders every broker should avoid:
Mummies are lenders who have been in business for years, but haven’t adapted and changed with the industry as needed. While experience is definitely something you’ll want to look for in your lenders, it’s also important to work with commercial mortgage companies that are flexible and willing to move forward instead of remaining stuck in their ways.
Like these mythical monsters, this type of lender will drain your borrower dry. Vampires are the lenders who charge upfront fees before underwriting the deal, and turn it down once those costs are paid. Stick with lenders who don’t demand an upfront fee from your borrower before they even look at the mortgage request.
Sometimes a broker will send a mortgage request to a lender, and then wait patiently for a reply that never comes. Multiple attempts are made to contact the lender to learn about the progress of the deal, but they seem to have simply vanished. Each time you resolve to send the deal elsewhere, you’ll get a quick email or a phone call letting you know that your deal is next in line to be underwritten, and then it’s back to silence. Don’t send your deals to the Ghosts; you deserve clear communication and prompt yes or no answer.
You send a commercial mortgage scenario to a lender and they call you with a summary of the terms they’d like to offer. Everything seems fair, and you urge your borrower to move forward. When the borrower gets the official terms, they bear no resemblance to what was discussed. Like Werewolves, these lenders seem to be a great solution to your borrower’s needs, but the reality turns out to be frightening. Make sure to work with lenders who are honest and upfront about the types of deals that can offer your borrowers.
Working with small-balance commercial mortgage lenders shouldn’t make you want to scream, and it’s important to avoid certain types of lenders. At the end of the day, brokers should make sure to choose an experienced, yet adaptable lender that is committed to serving their needs and the needs of their borrowers promptly and honestly.