Knowing where your borrower’s commercial mortgage scenario fits is an important part of successfully closing loans. Placing the loan with the right lender from the beginning will make for a much simpler and speedier underwriting process and closing. If you’re a residential broker looking to close commercial mortgages or a commercial broker looking to expand their product offerings, here’s what you need to know about where to place commercial mortgage requests:
When to send the request to a bank:
When your commercial mortgage borrower has excellent credit, a great property and is seeking a larger commercial loan amount, they will likely qualify for bank financing. Make sure you develop connections with local bankers as well as bankers who work for larger national banks so that you have several financing options for these borrowers.
When to send the request to a hard money lender:
Many commercial property owners will be unable to obtain traditional financing for a number of reasons. For some of these borrowers, a commercial hard money lender could be the solution. If your borrower has low credit scores, has owned their property only a short time, is looking for a bridge to sale or needs a loan fast, these lenders could be the best fit.
When to send the request to a non-conforming commercial lender:
What about borrowers who don’t fit in the bank’s credit box but don’t necessarily need a hard money loan? For these borrowers, a non-conforming commercial mortgage lender could be the answer. These lenders fill the niche between the bank and hard money, and can provide the financing your borrower requires. For example, if your borrower is looking for a long-term small-balance commercial mortgage, an experienced lender like APEX is a great solution. While more underwriting is required for these mortgages than for hard money loans, these lenders can generally close quickly.
It’s important to know what type of commercial mortgage for which your borrower is likely to qualify because this will allow you to accurately place the loan. Choosing the right type of lender for your borrower will make for a smoother process and closing, and will allow you to secure the best possible mortgage for your client.