January 11, 2019 by commercialloansoftexas
For brokers who are new to the small balance commercial mortgage niche, the secret of your success will be finding the most reliable lender. In order to decide whether a lender is appropriate for you, it is essential to get to know them & ask them as much info regarding their process as feasible. To get you started listed below are some very important question that you want to ask your lender.
What are your minimum & maximum loan sums?
Is stated income available for self employed borrowers that right off everything on their taxes?
Is Hard Money or Private money available for deals that have to close in 1 or 2 weeks for borrowers that have low FICO scores?
Before submitting a small balance commercial mortgage request to a lender, it is essential to ask how much or how little they are ready to lend to borrowers.
For how long has their company been in the industry?
It is also much needed to comprehend for how long a lender has offering small balance commercial mortgages. A seasoned lender is usually better fitted to offering borrowers with the correct loan & the most favorable experience.
What type of rates you can expect as a borrower:
If you are working with a non-bankable borrower, the costs are going to be in the higher side. Talk to your lender regarding their rate so that you can relay the info to your borrower & articulate why they can anticipate higher rates.
How flexible their terms are? Do they have 30 year fixed rates?
While working with non-bankable borrowers, it is essential for brokers to look for lenders who’ll take the time to comprehend a borrower’s circumstance. Ensure you discuss the programs & terms a lender offers prior to submitting a deal.
Can you close loans fast?
For several borrowers looking for non-conventional financing, it is because time is of the essence. Discuss with the lender regarding how long it takes on average for them to close a commercial mortgage loan, and ensure that their speed does not come at the expenditure of thoroughness.
To attain your potential being a commercial mortgage broker, it is essential to comprehend what your lender can proffer borrowers & how they operate all through the lending procedure. This will let you select lenders who’re a great fit for you & your borrowers, leading to more closed loans & extra earning.
Commercial Loans of Texas is a small business lender specializing in small balance commercial mortgages, commercial real estate mortgages, refinancing, and funding. We also offers commercial mortgages for self employed borrowers or borrowers with credit challenges. Get in touch with us now to discuss your small balance commercial mortgage needs.
November 10, 2018 by commercialloansoftexas
Because of the decline in capital in typical banking markets, the majority of the banks have lacked the capital to finance large loan growth. Though several banks have gotten their balance sheets to the point where they’re healthy again & are actively financing new transactions, many banks have limited overall capacity & are emphasizing their loan growth on core low risk lending markets like owner-occupied commercial properties, apartment buildings, and C&I lending relationships(commercial & industrial lending such as receivable, equipment, and inventory finance).
In order to fill the gap left by typical commercial bank lending, there has been a rush of private capital into the market keen to make higher risk loans. Listed below is a sample of many of the loans regular banks aren’t eager in making where private capital has come in & filled the gap.
If a borrower has a poor credit history, had to file bankruptcy in order to prevent a bank from taking aggressive collection action, or has missed some loan payments because of pressure with other holdings, majority of the commercial banks wish nothing to do with those transactions. However, a private lender can look beyond these problems & look at the real worth of the asset and cash flow they’ll be loaning against, and provide these loans regardless of the credit history.
Regular banks are pretty reluctant to finance construction loans in this market, whether it’s ground up construction or just rehab construction, because of the increased level of risk concerned with those projects & the increased capital needs banks have put into place for those projects. Private lenders don’t have extra capital needs, so as long as they can allay much of the risk, they’re willing to finance construction loans.
Quite often borrowers have properties that are in transition & may have a high vacancy rate or are in need of some work. Conventional banks often don’t wish to take on the risk of a property that’s not generating strong cash flow & isn’t fully improved. However, private lenders don’t hesitate to take that improvement risk & are willing to finance many such projects.
As you can see, there’re several reasons why private lenders makes sense in this market. With a lot of private lenders providing conforming fixed rates, quite often the products these lenders are giving are just as competitive as numerous bank programs, but are accessible to a larger proportion of commercial loan borrowers.
If you are in need of competitive commercial lending in Texas, look no further than Commercial Loans of Texas. We specializes in commercial lending in Texas for small to mid-size firms that require working capital financing to meet income needs.
October 22, 2018 by commercialloansoftexas
Mortgage brokers throughout the country are taking a second glance at small balance commercial mortgages, and for good reason. Sub-$5 million commercial loan origination reached a record amount in 2015, and the market persists to expand as more brokers found the massive impact these small loans can have on their business.
Several different kinds of mortgage originators are finding success in the small-balance sphere, from domestic brokers looking to expand their new business with a new offering to seasoned commercial pros who simply wish to capture a larger part of the marketplace and eventually close more deals. What all have in common is a want to develop their business & meet the requirements of a previously undeserved group of borrowers.
Listed here are a few reasons why now is the time start thinking small balance.
There’s demand in the market:
Stated income and asset loans are available for small balance commercial loans including for multi family that might have a low occupancy rate that would exclude them from traditional bank financing.
According to a recent report, sales of small-balance commercial properties totaled $22.8 billion in the first three months of 2017, surpassing last year’s record first quarter volume. Usually borrowers range from business owners looking to buy their small office building to investors refinancing their multifamily property following a recent renovation.
Still, most of these borrowers find it hard to secure financing on their own, either due to the small loan amount requested or a blemish on their personal or business history. This is where mortgage brokers prove their value. Their expertise & industry connections are making the difference for credit-worthy borrowers all over the country, particularly for those who may consider themselves to be “UN-bankable.”
Diversification is smart:
Put simply, the mortgage industry is an unstable place. Since no one can forecast with total accuracy what direction the market will take, originators must plan for times of insecurity. Diversifying an existing commercial or residential business with small balance commercial mortgages is a wise strategy because there’s a near-constant need for financing regardless of how the rest of the market is performing.
The deals are not too complicated:
Not like large scale commercial mortgages, which may take several months to close, small balance commercial transactions usually close inside 30-45 days. The shorter process length is probably one reason why domestic originators are drawn to sub-$5 million commercial deals.
No commercial mortgage is without its complications, but brokers can anticipate fewer headaches when they take on smaller deals.
Contact Commercial Loans Of Texas if you are looking for a reliable small balance commercial mortgage lender in Texas.