If you have ever thought about financing a
commercial real estate property, the thought of using a commercial mortgage
broker may have crossed your mind. However,
if you are like some people, you may have debated using a commercial mortgage
broker based on the belief that it is more expensive to use a broker rather
than go directly to a lender. This common belief is a myth.
The reality is that there are a number of ways
in which you can save money by engaging a mortgage broker to provide assistance
with your commercial real estate financing needs and objectives. If you take the time to determine the value of
using a commercial mortgage broker, you will surely see that it is money well
spent.
Locating a Lender Locating a lender to fund your commercial
mortgage is not as easy as it may seem. Due
to the wide range of property types, loan types and special circumstances, a
single lender simply cannot offer loan programs for all potential loans. You may waste a considerable amount of time simply
trying to find a lender that offers the program you need. A qualified and experienced mortgage broker
will have multiple lender relationships in place who can offer a wide range of
lending options. Some brokers may even have
relationships in place that give you access to hundreds of other lenders
offering an unbelievable amount of loan options.
Risks in working with a Single
Lender You may
spend the time and locate a single lender that can meet your needs, but you are
not out of the woods yet. By working
with a single lender or bank you are putting all your eggs in one basket. The approval process can take a good deal of
time that you may not have. Then what
happens if the loan application is not approved by that lender? Can you afford to go through the process a
second time risking a similar outcome? By working with a broker, your loan
application can be submitted to multiple lenders. This not only increases the chances that your
loan will be funded, but it also gives you and your broker more bargaining
power to get the best deal.
Cost Variations between
Lenders One of
the most significant ways in which you can save money by using the services of
a commercial mortgage broker rests in the fact that there can be notable differences
in the interest rates, costs and other fees charged from one lender to the
next. A broker will help you in
identifying the most reasonably priced options available from these different
mortgage lenders. On first blush, the
cost differences from one lender to another may seem small. But remember, in
most instances we are
talking about loans in the millions of dollars. Even if the interest rate difference is
minimal on the surface, over time this can add up to a significant amount of
money. Active commercial mortgage
brokers are often times provided special rate options based on the volume of
business they bring to a lender and this rate savings is passed along to the
borrower.
Support Services Another avenue through which a commercial
mortgage broker can help you save money is through their existing relationships
with other industry professionals. A
good commercial mortgage broker has a preassembled network of professionals
including appraisers, accountants, lawyers and other service providers that
they work with on a regular basis. Not
only do you not have to spend the time to find these required resources on your
own, but often times you can get a reduced rate on the services due to the
brokers existing relationship. Furthermore,
a good commercial mortgage broker will have a staff of professionals to see the
loan through to the closing. Securing a
commitment is half the battle. It takes
a village to get to the closing efficiently.
Fees of Commercial
Mortgage Brokers It is
true that in the end, you do pay a fee for utilizing the services of a
commercial mortgage broker. However, you
will find, as many commercial investors have in the past, that working with a
commercial mortgage broker will help ensure that your needs are met and that
you get the best deal in the process. The
bottom line is that what you are paying for is a professional on your side,
someone to watch out for your best interests.
Similar to the way a lawyer protects your interests in legal matters. You wouldn't go to court without a lawyer, so
don't finance your commercial mortgage without a broker.
A professional commercial mortgage broker will
have solid relationships with numerous lenders and will immediately match you
up with the best lender based on your needs.
Whether you are in need of a construction loan, long term fixed rate
loan or bridge loan, a qualified broker will be able to provide guidance in
choosing the best lending source. If
timing is an issue, the broker will be able to leverage their long term
relationship with the lender to garner “express” processing of your
request. Everyone needs an advocate at
times – a commercial mortgage broker is your advocate in navigating the
commercial lending marketplace.