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Answering Common Questions About Small-Balance Commercial Mortgages

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At APEX, we get a lot of questions from brokers about the process of finding and closing small-balance commercial mortgages. Many mortgage brokers are interested in the product, but aren’t sure how to get started brokering these loans. Whether you’re a residential broker looking to close the occasional small-balance commercial mortgage or a commercial broker who usually deals with larger transactions, these loans are a nice way to increase your income.

Here are the most common questions we hear from brokers and our answers:

Where can I find these applicants?

It’s not difficult to connect with small business owners who can’t obtain bank financing for their commercial property. Reach out to past residential borrowers who also own a commercial property and let them know you can assist them if they need a small-balance commercial mortgage. Contact your referral network and tell them you’re now able to help their non-bankable clients obtain funding.

What do I need to submit?

Once you have a loan scenario you’d like a lender to review, it’s important to send them all of the necessary documents. Generally, a completed 1003 or commercial application, a tri-merge credit report with trade lines and a loan summary are the most important documents to submit for the initial review. However, you should talk to your lender first to develop an understanding of exactly what they need to begin the underwriting process.

How long will it take to close?

Like any loan, how quickly a small-balance commercial mortgage closes depends on the complexity of the scenario, the loan details provided by the broker and the experience of the lender. Because nontraditional lenders aren’t subject to the same regulations as banks, though, these loans generally close fast. For example, APEX can close small-balance commercial mortgages in as little as 2-3 weeks from the date a commitment letter is issued.

How much can I make on each deal?

This will vary from lender to lender, but because small-balance commercial mortgage lenders aren’t limited by regulations regarding fee caps, you can charge more than you would on a bank deal. APEX allows brokers to make up to 5 points on each deal, including 2 YSP, and we protect that fee.

Adding small-balance commercial mortgages to your product offerings is a simple way to earn additional income. These loans are easy to find and don’t require a lot of paperwork for a submission. They generally close fast, and you can make more money on these deals than on loans closed with traditional lenders. Strengthen your business today by brokering small-balance commercial mortgages.

Do you have more questions about small-balance commercial mortgages or APEX? Call 800-262-2739 or contact us online to learn more.


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