Commercial
Lending & Mortgage Bankers/Brokers
Why use an Independent Commercial Mortgage Broker/Banker to Secure a Commercial Loan for your purchase or refinance of a commercial property?
Being a creature of habit can cost you plenty when it comes
to applying for a commercial mortgage instead of going through
an independent commercial mortgage broker. Let me tell you
why.
Banks are not in the business of originating Commercial loans for Life Companies, Pension Funds, Capital Markets or Real Estate Investment Trusts. These Non-Bank Competitors provide financing for quality properties producing income for loan amounts greater than $500,000 through Commercial Brokers and Loan Correspondent channels. Over 90% of large income producing properties are now financed with CMBS Loans or Life insurance loans. (Commercial Mortgage Backed Securities). Over 40% of all NEW commercial loans are CMBS loans securitized in Capital Markets. CMBS loans; (commercial mortgage backed securities), came about in the early 1990s and were created by the "Resolution Trust Corporation" to bail out the banks during the Real Estate Crisis of the early 1990s.. Since then, banks are further regulated and cannot lend money at these rates except through Capital Markets. The pricing has become so compressed, and markets so efficient, there is little room to pay executives, layers of beauracy let alone stock holders. This is where the Independents (Brokers and Bankers) have stolen the show from the banks.
Most
business people have an established relationship with their
bank and take advantage of that relationship whenever they
need to borrow money. However, here is the question that you
should be asking yourself: "is your bank taking advantage
of you?". More and more the answer to that question is
"Yes". Once
you have an established relationship with a bank they tend
to start taking your business for granted. Not necessarily
in a bad way, mind you, but in the way that a mutual level
of comfort exists. The bank knows your reputation for keeping
your word; they know how much money passes through your account
and they know what your business does. You know that there
is someone that you can ring up who knows you and will work
with you to get a commercial mortgage. Seeing
as how applying for a commercial mortgage can be a time consuming
affair, it is a natural tendency to go to the people that
you already know to get the deal done with the minimum amount
of red tape.
In essence you are locked into accepting whatever commercial
mortgage "package" your bank offers. Banks certainly have their place and we all need them. But, the regulatory environment and the oversight of the industry has created an unleveled playing field for banks in some segments of the commercial lending market.
Now,
on the other hand, if you take advantage of the services that
are offered by an independent commercial mortgage broker then
a whole world of options open up for you. Your broker is able
to shop your commercial mortgage application among a large
number of lenders who have the products, flexibility, rate and terms that you as a customer require. As a result
you are often offered deals that beat your bank's best offer
by a considerable latitude. Banks are not in the business of making Non Recourse Loans or loans without personal guarantees. Bankers and Brokers that originate loans for Fannie Mae DUS lenders, Conduit, or Life Insurance Companies specialize in these types of financing packages. If a guarantor's personal credit score is below 650, the bank will swiftly show you the door.
Imagine
your potential savings possibilities when you engage an independent
commercial mortgage broker who is able to find you two, three,
four or even ten or more lending sources with an array of products and knows who wants to compete
for your business! Plus, a broker doesn't earn any fees unless
a commercial mortgage loan deal closes. In many cases, large commercial banks are competing in your market through a broker/correspondent channel. Even better, the broker earns their
fee from the lender in many situations so it doesn't cost you anything to save
all of that money.
Still have doubts?? Visit, but please come back All About Commercial Mortgages
