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Educational articles for Commercial Mortgage Brokers

What Mortgage Brokers Need to Know about Underwriting

The speed and success of the underwriting process for a small-balance commercial mortgage often depends on how complete the loan submission is and how well the broker understands the deal. In order to close the loans successfully, it’s important for brokers to have a solid grasp of their lender’s underwriting process and what they’ll need in order to complete the process and finance your borrower’s request. Here’s what every small-balance commercial mortgage lender wants you to know:

  • Understand your borrower’s situation.

    Before submitting a commercial mortgage request, it’s important to fully understand your borrower’s current financial situation and how this loan will benefit them. It’s important to make sure that the mortgage makes sense for both your borrower and your small-balance commercial mortgage lender. If the deal doesn’t make sense and you submit it anyway, you’ll not only be wasting your own time, but your borrower’s and your lender’s as well.

  • Submit the necessary documents.

    Nontraditional commercial mortgage lenders can generally underwrite a mortgage fairly quickly, but in order to do so, they’re going to need the right paperwork. It’s very important to submit all of the pertinent information about your borrower and their mortgage request up front. Make sure to include a basic application, a tri-merge credit report, a loan submission summary describing your borrower’s situation and plans for the money and property photos. Talk to your lenders and get to know if they have any additional submission requirements.

  • Be honest and open.

    If there are issues during the underwriting process, it’s usually because the borrower or the broker didn’t disclose information that they thought would hurt a loan’s chance of closing or increase their interest rate. Nontraditional commercial lenders can work through many obstacles as long as you’re honest about the borrower’s situation. Make sure to encourage your borrower to be open about any past financial issues, as this will allow your lender to underwrite the mortgage properly. Read more in our previous post on understanding underwriters to get more commercial mortgage deals done.

A broker’s original submission and understanding of a loan determines its success throughout the underwriting process. In order for your lender to underwrite and close the commercial mortgages that you present, it’s crucial that you know what should be included in each loan submission, as well as understand the important of being open regarding your borrower’s financing request. By considering the above points, you’ll be able to better determine the loans that fit your lender’s guidelines and, as a result, close more small-balance commercial mortgages. Submit your commercial mortgage deal to APEX today!

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