CFG

Residential Mortgage Brokers Are Going Commercial!

Residential mortgage brokers are going commercial. More and more residential mortgage brokers are expressing their interest to enter the commercial finance market. Not only with the desire to offer a whole range of competitive commercial mortgage programs, but also asset-based lending and equipment finance products.  These additional commercial financing products would go hand in hand with an established residential mortgage broker business. That is certainly good news for commercial lenders, which regularly depend on that broker business. Commercial lenders understand that this is a competitive business, and realize that borrowers are depending more and more on brokers to shop for that low rate and better terms. This makes the broker a very hot commodity. Since commercial financing would be new territory for the residential mortgage broker, a broker may require some assistance from the lender on guidelines and procedures.

That should not be a problem. Commercial lenders are actively competing for that broker business, so most lenders would work with the broker. The first thing the broker should do is to familiarize himself/herself with the commercial lender's general guidelines, including: Property Types Minimum and Maximum Loan Amounts LTV and DSCR Requirements and Territory Covered. Second, not to inundate the lender with paperwork on initial presentation. Most lenders would express their interest or lack thereof with limited information. A one-page summary outlining: Borrower Information Property Description Use of Funds Last 3 Years Profit & Loss Statement and Balance Sheet  should be sufficient for a lender to make an initial determination. If the initial summary is accepted, then the additional information can be submitted.