As published in Scotsman Guide's Residential Edition, July 2005.
Many would-be first-time commercial-mortgage borrowers never make it through the underwriting process. The drastic difference between residential- and commercial-mortgage applications often catches borrowers off-guard. Differences in underwriting guidelines and documentation also can frustrate first-time commercial borrowers and kill a deal before it ever starts.
As a mortgage broker, you can solve this problem early by training yourself to think like the lender. Many brokers do not worry about the underwriting “nuts and bolts” of residential mortgages, let alone those of commercial mortgages. Understanding the underwriting issues of commercial-loan packages and finding the necessary information to address them put brokers ahead of the game.
This knowledge also endears brokers to their borrowers. These clients want to deal with mortgage-financing experts who look out for their well-being, even if it means losing a few deals to protect that trust. Borrowers — right or wrong — believe mortgage brokers should know if a loan application will be approved or denied before it is ever submitted to an underwriter. By doing just that, brokers can gain a competitive advantage and referrals, in addition to a reputation for keeping underwriting times short and being experts.
By reducing underwriting time and sending complete loan packages to lenders, brokers earn the respect of underwriters. Underwriters remember brokers who send complete, well-documented loan packages and those who don’t. Guess which group gets priority treatment?
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