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Commercial Mortgage Fundamentals for New Brokers

Commercial Mortgage
Posted on 
May 3, 2021

If you’re interested in closing commercial mortgages for small business owners and property investors, it’s important to get a grasp of the basics. Understanding the industry, how lenders operate, and what kinds of borrowers you’ll encounter will help you to learn how to choose the right lending partners, how to place your borrowers with the right lenders, and how to close loans quickly and efficiently.

Below is a selection of some of our blogs dedicated to helping mortgage brokers learn more about the fundamentals of commercial mortgages.

Small-Balance Commercial Mortgage Basics

For residential mortgage brokers looking to increase their income and expand their business, the small-balance commercial mortgage niche offers plenty of opportunity. This underserved market is full of borrowers who will benefit from your expertise. Of course, if you’re new to commercial mortgages, you probably have some questions. Click here for some basic information to get you started.

Understanding Commercial Mortgage Underwriting

Nonconforming commercial mortgage lenders have the ability to close loans for their brokers in a timely manner, but the speed of the underwriting process depends largely on brokers. In order for your transactions to close quickly and smoothly, you need to understand what your lender needs in order to fully underwrite a deal. Click here to learn about what you need to know in order to get your borrower’s deal funded and to earn your commission.

How a Commercial Mortgage Lender Calculates Loan-To-Value

There are a number of factors that a small-balance commercial mortgage lender takes into consideration when determining the loan-to-value (LTV) percentage that they’re willing to offer a borrower. The LTV is the ratio of the loan amount to the value of the property, and is calculated using information about the borrower and the property. Click here to read a breakdown of the elements which can affect your borrower’s LTV.

Helping Your Commercial Mortgage Borrower Craft a Letter of Explanation

When you’re working with a non-bankable borrower seeking financing for their commercial property, it’s important to understand and be able to account for any obstacles they’ve faced in the past. You’ll be sending your lender various pieces of information that might not give your lender a clear enough picture of your borrower’s financial situation. A letter of explanation is a simple solution to this problem. Click here to learn how to help your borrower craft one.

Preparing Your Non-Bankable Commercial Mortgage Borrowers

Commercial mortgage brokers can face a number of objections from non-bankable borrowers throughout the lending process. However, many of these issues will cease to exist – or at least be easier to manage – if you simply prepare your borrower for the type of loan they can expect to qualify for. Click here to learn more about how to get your borrower ready.


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