The Importance Of Using A Commercial Mortgage Broker

Your question may be..."Should I utilize the services of a commercial mortgage broker or go direct to the bank when seeking a commercial loan?"

This may come to mind when you are entering into a contract for a real estate purchase or business purchase, or simply seeking to refinance your real estate investment.

Do you know the differences between the broker and the lender?

When you have limited contacts outside of your main banking relationships, you may be losing out on financing options that may make a huge difference on your mortgage payment and/or loan terms.

Limiting yourself to one lender removes you from the competition between the banks which can cost you dearly over the short or long haul.

This is where the commercial loan broker comes in. And not just any loan broker who says they can get you a commercial loan...but one who has a track record of getting commercial loans funded...preferably an individual or company who specializes in this area of the lending industry. Get a credible referral from a credible person in the industry.

The loan broker knows who the aggressive banks are and who are not. Banks can change their loan programs and lending limits frequently depending on their lending appetite. The loan broker will place your loan transaction where there will be the least amount of brain damage all the while tailoring a loan product that will meet your goals.

Additionally, the loan broker can in many cases influence the timing of getting your loan funded. Many underwriting issues can be hurdled as well due in part to the relationship between the loan broker and banking staff.

A question that commonly arises is "Do I have to pay additional loan costs to go through a loan broker?"

In the commercial lending industry, most banks will waive their loan fees and allow the broker to earn the fee instead for bringing the business into the bank, therefore, not costing you anymore in costs had you gone direct to the bank yourself.

Due to the current lending environment, lenders are putting borrowers through the meat grinder for 100% compliance with banking underwriting guidelines. Thus, many borrowers struggle to get past the pre-qualification stage due to unacceptable
or incomplete financial statements, or simply, the property does not stand up to the banks lending criteria.

Get thoroughly vetted by your loan broker as quickly as possible before you begin to search for your property. Attempting to buy real estate before you have been pre-qualified is like pulling the cart before the horse.

Typical commercial loan transactions are SBA financing, multifamily, commercial, retail, mixed use, industrial, medical building and other special property types and uses.