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Optimism in the Commercial Mortgage Sector

Commercial Mortgage
Posted on 
May 17, 2016

Executives in the commercial mortgage industry have a mostly optimistic outlook, according to the “2016 Commercial Real Estate Outlook” report released by CIT Group, Inc.

“Commercial real estate executives appear relatively optimistic about the general state of the market in 2016, with many predicting higher than average deal volumes for their firms,” said Matt Galligan, president of CIT Real Estate Finance. “Further, when considering the adoption of new technology, most believe the influx of commercial real estate tech companies is revolutionizing the industry.”

According to the report, 52% of commercial real estate executives surveyed said the sector is either strong or very strong, and 71% said they believe adequate capital is available for investment in commercial properties.

More than half of the survey respondents said that they are increasing the duration of their financing in order to take advantage of today’s relatively low rates over a longer period of time.

With solid optimism from lenders, now is a great time for brokers to begin closing commercial mortgages. Residential brokers looking to close deals in the commercial sector would be wise to begin with small-balance mortgages, since these are loans they’re more likely to see and they’re easy to close when working with the right lender. While you should always ask lenders what they require in a submission, here are the basics every lender will require to get started:

A loan submission summary:

A summary of the deal will help your lender understand your borrower’s situation and why they need the money.

An application:

A basic, completed commercial mortgage application or 1003 will provide your lender with the basic information they need to begin the underwriting process.

A credit report:

A tri-merge report is preferable, but as long as the report has a score and trade lines, your lender should be able to determine if your borrower’s deal is a good fit.

Property photos:

A picture is worth a thousand words, and property photos will help your lender underwrite the deal.

Take advantage of the optimism in the commercial mortgage industry and devote some time to small-balance loans. They’re a simple way to expand your current product offerings and earn additional income.


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