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The Benefits of Closing Nonconforming Commercial Mortgages

Commercial Mortgage
Posted on 
May 24, 2016

Whether you’re a commercial broker looking to expand their product line or a residential broker interested in closing smaller commercial transactions, the nonconforming commercial mortgage niche is a great option. This under-served market provides brokers with the opportunity to branch out and increase their business.

Here are the benefits of closing these loans:

You can close more loans.

It’s probable that if you broker commercial mortgages, you’ve come across borrowers who don’t really fit when it comes to traditional or hard money financing. Nonconforming commercial lenders provide you with an option for borrowers who can’t qualify for bank financing, but who would prefer to avoid the hard money route. The nonconforming option will allow you to find financing for borrowers you otherwise couldn’t place.

Nonconforming lenders are flexible.

Banks and other traditional lending sources have to adhere to strict guidelines and regulations, so plenty of lenders fall outside their qualifications. A small-balance commercial mortgage lender can be a great solution for these borrowers, since they are more willing to listen to your borrower’s story and understand their unique situation.

They accept most commercial property types.

Smaller commercial properties are often seen as non-profitable by traditional lenders, so they choose not to lend on those. Nonconforming lenders understand that this is a niche market and are prepared to lend on smaller and unique commercial properties.

You can earn more money.

Nonconforming commercial lenders often have higher fee caps than their traditional counterparts. For example, while you might only be able to earn a 2 to 3 percent commission on a bank loan, there are small-balance commercial lenders who allow brokers to charge up to 5 percent.

Brokers looking for the opportunity to close more loans should consider the small-balance commercial mortgage industry. There is demand, the lenders are flexible and most smaller commercial properties will be eligible for these mortgages. Closing nonconforming commercial loans also provides brokers with the chance to earn additional income.

If you’re interested in closing small-balance commercial mortgages for your non-bankable borrowers, give us a call at 800-262-2739 or contact us online.


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