Commercial mortgage brokers should save their clients time, aggravation and of course money. The bottom line is that the brokers experience and expertise should be valuable for the borrower, who may have little knowledge of this often complex and daunting process of closing a commercial mortgage.
More specifically a few benefits of working with a commercial mortgage broker include:
1. Introducing you to loan programs that are not offered by your local bank.
Most commercial mortgage brokers will be able to introduce borrowers to loan programs that are not obvious. Lenders that offer untraditional loan programs (such as stated income loans, commercial 30 year fixed or second lien position loans, etc) do not have bank branches. Instead these lenders depend on mortgage brokers to produce their loans. So, brokers can give more options (often much better options), to the borrowers they serve.
2. Brokers can give you solid lender recommendations based on industry experience.
The real differences between lenders can be difficult to uncover. The obvious, such as which banks / lenders are quoting the lowest rates, offering the best terms, etc will be relatively easy to discover.
The more important issues, such as which lenders are re-trading their borrowers, actual closing loans and not just taking application fees or have highly "painful" underwriting process is where a broker really earns his fee. This knowledge is only earned by being involved day to day in the industry and by closing many commercial loans.
Most borrowers may close 2 or 4 commercial mortgages in their lifetime, while a good broker will close 2 to 4 loans a month. This experience is critical in helping the borrower achieve their goals.
3. Brokers are on the same side of the table as borrowers.
We get paid to close loans. Obvious – but when compared to a bank loan off icier, that is on a salary and has weekly meeting quota's, weekly application quota's, etc their agenda might not be simply to figure out the best route to get your loan closed. So the point is a bank loan officer may "lead you on" to take you application simply to protect his / her job – and waste your time.
4. Commercial brokers should save you a considerable amount of money, not cost you bank fee.
By creating a competitive environment, with relevant lenders to your situation, a good broker will get multiple funding sources to compete and produce the best pricing possible. If the broker has a solid reputation with lenders, they will take the loan packages more seriously and spend more time with it, believing that it is a legitimate transaction. Lenders also will have more pressure to not re-trade the deal in fear of losing future business that the broker could provide.
5. A solid broker should make the entire process more efficient.
In the same vain as number 2. A broker worth his salt should be able to identify solid options for the borrower based on their complex and unique set of circumstances. It is often a single small detail that will slow or kill a deal in process. A sharp broker should be able to spot these small details that could otherwise cost the borrower thousands of dollars, or waste months as the wrong lender wrestles with the file, which should not have been in their hands in the first place.
Not all brokers have the same skill sets or experience, but commercial mortgage brokers have earned a place in this business and can assist borrowers in securing a commercial mortgage.