Are you a residential mortgage broker interested in making more money and closing more deals? If that’s the case, you need to consider working with borrowers in need of small-balance commercial mortgages. Becoming a commercial mortgage broker focused on these smaller deals will allow you to bring in more business without adding too much to your workload. Here are some of the benefits of becoming a commercial mortgage broker:
If you’re closing residential mortgages for clients, you have all the necessary skills and sources to close commercial mortgages for non-bankable borrowers. Generally, these loans will be simpler in many ways – there’s a lot less paperwork to submit, and as long as you develop a solid understanding of your borrower and their request before sending it to a lender, you’ll be able to provide the lender with answers to all of their questions. It’s likely that you’ve already closed residential mortgages for small business owners, so clients in need of commercial mortgages shouldn’t be tough to find. Additionally, you don’t need to be licensed to close commercial mortgages in most states.
Bankable deals – whether they’re residential or commercial – take time to close. If you’re working on getting a borrower a commercial mortgage from a bank, it could take months. For some small business owners, this isn’t going to work. Whether it’s because they’ve got a balloon payment coming due, they need funds to purchase a property quickly or they’re trying to take advantage of a great deal for their business, many borrowers are on a tight deadline. If you work with alternative lenders, you can often get these borrowers the commercial mortgages they need in a matter of weeks.
You can earn more.
Banks and other traditional lenders are more heavily regulated than alternative lenders, so brokers can expect a lower fee cap when doing business with them. If you work with non-conforming lenders, you can usually earn quite a bit more than you would closing bank loans. For example, brokers working with APEX can charge up to 5 points up front and can earn an additional 2 YSP on most deals.
If you’re not closing the small-balance commercial mortgages that come across your desk from time to time, you’re losing money. These mortgages are right in your backyard – all you need to do is start looking for them. Closing these deals is a quick, easy way to grow your business and to earn additional income.