While working as a commercial mortgage broker can provide you with great opportunities, it can also present you with some unique challenges. As a broker, you need to factor in a lender’s fees when determining your commission rate, as well as overcoming a borrower’s reservations about working with a middleman. One solution to these obstacles is becoming a correspondent lender.
Here’s what you can expect as a correspondent lender:
You get more competitive pricing.
Particularly when working with borrowers who cannot obtain bank financing, becoming a correspondent lender can be a major benefit. Because correspondent lenders are generally offered lower rates, not only will your borrower benefit in the long run, but it will be easier for you to sell them on the deal.
You can earn more money.
As a correspondent lender, you will be able to earn an undisclosed premium on each deal you bring to your lender, enabling you to increase your income. Because you are the lender, the fee you are charging stays between you and your investor.
You can close commercial mortgages in your own name.
As a commercial mortgage broker, you need to close all the loans you originate in your lender’s name. As a correspondent lender, you can present yourself as the lender and close deals in your company’s name instead.
You are able to advertise as a commercial mortgage lender.
Because of the ability to close in your own name, you can also advertise yourself to borrowers as a lender. This will be beneficial to your company as borrowers are often more comfortable working directly with a lender.
Commercial mortgage brokers are afforded many opportunities, one of which is to become a correspondent lender. Correspondent lenders see the added benefits of competitive pricing and the ability to earn more, as well as closing in their name and the ability to advertise themselves to borrowers as a lender. If you’re looking to take your success to the next level when it comes to closing small-balance commercial mortgages, becoming a correspondent lender might be the solution.