Tips for Avoiding Challenges in Commercial Mortgage

Whether you are a small mortgage broker or an organization, you have to deal with some challenges that are possible to avoid. Depending on the size of your business, you have to overcome some unique obstacles during different stages of the loan origination process. Here are some tips for avoiding these challenges when you work with non-bankable borrowers. 

Be Upfront 

A non-bankable borrower is able to qualify for certain types of commercial mortgage. Make the borrower understand this so that the borrower can have realistic expectations. Your origination system processes applications for different products in different ways. A commercial loan underwriter also processes each application differently. Let such borrowers know that they are not going to get bank rates. However, you have some deals to offer. Explain deals that are best for their financial situations. 

Necessary Information 

The completion of the commercial mortgage process takes time. There can be a lot of delays that can be avoided by automating the process. Use a commercial loan underwriter or a loan origination system. These delays can also be due to inaccuracies and inconsistencies in documents. Request all the required documents you need to review and underwrite deals. Once you have requested documents, make sure that you don’t have to wait for days or weeks. You must get all the information as soon as possible. 

Emphasize the Positives 

Not only non-bankable borrowers, all borrowers expect lower rates. However, most of them end up having a higher rate. Sometimes, the appraisal is also costlier than what they are expecting. You can ask the borrower to focus on the deal’s positive aspects. For example, the deal may decrease the monthly payments the borrower has to make. It can be a fixed-rate mortgage. Maybe, the loan will be closed faster. This is good for the borrower. 

Focus on the Borrower’s Goals  

The borrower has a goal to achieve. Achieving that goal requires money and this is the reason why the borrower is working with you. The borrower may want to improve an existing property. The borrower may want to invest in a new commercial property. Maybe, the borrower wants to pay off debt. A non-bankable borrower has to pay higher rates. However, you should remind the borrower of the goal to be achieved.  

You can address most of the challenges in such deals. Also, make use of commercial loan underwriter systems.