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What to Look for in a Direct Commercial Mortgage Lender

Commercial Mortgage
Posted on 
May 31, 2018

For residential mortgage brokers looking to expand into the small-balance commercial niche, choosing the right direct lenders to partner with is crucial. Who you work with will play a large part in determining your success within the industry, so it’s important to choose lenders who will allow you to meet your goals.

Here’s what you should be looking for in a direct commercial mortgage lender:

A steady source of funding

While there are certainly great direct lenders whose funding comes from various investors, if you’re looking for more stability, you’ll want to work with a direct lender whose funding comes from a single, stable source. This allows the lender more freedom in choosing to whom they will lend as they do not have to answer to a group of investors whose interests may not be the same as yours or your borrowers’.

Flexibility in underwriting

When choosing a direct commercial mortgage lender, you’ll want to make sure the lender will listen to your borrowers’ stories and take a common-sense approach to underwriting deals, particularly if the borrowers you work with aren’t bankable. Choosing direct lenders with this flexibility will allow you to close more commercial mortgages for more borrowers.

Quick closings

In many cases, borrowers seeking small-balance commercial mortgages from alternative lenders are doing so because time is of the essence. Maybe they have a ballooning mortgage or a tax lien that needs to be paid off quickly. In these cases, you need to work with lenders who have a proven track record of closing loans fast.

Fee protection

It’s important to work with a lender who knows your value. Every small-balance commercial mortgage is different and will involve varying levels of work to close. You should be able to set a fee that you think is appropriate, so make sure you work with a direct lender that understands this.

Small-balance commercial mortgages represent a great opportunity for brokers looking to expand their offerings. In order to succeed, though, you need to choose the direct lenders with whom you work carefully. This decision will impact your career going forward, and making the right choice will allow you to close more commercial mortgages and earn more.


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