Commercial Mortgage Broker

A mortgage broker’s job is to counsel you on different lenders, take your application, and process your loan. Lenders usually have only a small number of loan programs, which may exclude many borrowers. A mortgage broker counsels you on the loans available from a wide array of lenders.

Mortgage brokers do not make loans. A mortgage broker is a service provider who offers the loan products of multiple lenders. They are responsible for advising you on any issues that may come up during the application process such as credit issues. The commercial mortgage broker is responsible for almost all the aspects of the loan process. The broker will take, compile and process your complete application. The commercial mortgage broker will order the appraisal and verify your credit. They will submit your application to one or several lenders. The commercial mortgage broker will make sure your loan gets to closing.

Commercial mortgage brokers deal with a number of lenders. They deal with lenders who specialize in various market niches that many other lenders avoid, such as loans to applicants with poor credit ratings, loans to borrowers who do not intend to occupy the property, loans with minimal or no down payment and so on.

The current economic condition has brought many changes to the lending environment. There is little capital for use and deals are difficult to close. Now, many borrowers seeking lending are turning to commercial mortgage brokers. As little as two years ago, when lending was very free and available, a broker relationship was not so critical. You need a good commercial mortgage broker who has a relationship with lenders so that now, when lending is difficult, they have referrals to buyers to help them finance their assets. These well-connected brokers will contact various lenders they know to find acquisitions for buyers and make referrals. A good commercial mortgage broker will evaluate the deal and the buyer, and sometimes recommend a buyer. An astute broker will recommend multiple lenders and let the buyer decide.

Commercial mortgage brokers can also be important because they understand what lenders’ parameters are. Some large lenders have strict limits as to what they are willing to lend on, from geography restrictions to brand requirements. Large transactions, usually approaching $20 million, may require multiple lenders. The success of these large transactions can be attributed not only to the big lenders, but also to the buyer’s financial strength. This is something that a commercial mortgage broker has studied. An astute broker follows a process to financially qualify the potential buyer, including obtaining financial statements of involved partners and getting references from previous franchisors and brand contacts to check past relationships. Paperwork is another major requirement for lenders and brokers. A good mortgage broker makes sure the lender has everything they need in order to close the deal.

The relationship you develop with your commercial mortgage broker should be the same you would have with a financial planner. Changing mortgage brokers on every real estate deal does not make good financial sense. An experienced broker will find the best source of financing for your next purchase and help you manage your entire real estate portfolio. The investment you make in real estate is only as good as the financing you obtain.