When vetting the various lenders within the commercial mortgage marketplace, you should take the time to consider the questions you’re going to ask. Learning more about the company’s lending practices can help you pinpoint the right lender for your projects. In this post, we’ll list five important questions to ask your commercial mortgage lender.
What Are the Application Fees?
When exploring your lending options, one of the more important considerations is the total amount of lending fees for the project. Ensure you have this information at your direct disposal and choose a company that offers full visibility into their fee structure. Ask that the company provides you with a complete breakdown of their fees and how they're allocated.
Fees typically include both lender origination fees and closing fees, which can include costs associated with taxes, title, and the property appraisal.
What is the Average Loan Size for Your Company?
When working with a lender, you want to be confident they can provide you with the highest level of customer service. If the lender works with $50 million loans on a regular basis, you might be concerned they won't provide you with a high level of care if you have a $2 million loan to your name. Make sure that the company is committed to providing comprehensive service regardless of your loan size.
Will I get my loan within my expected timeframe?
The commercial loan transaction process is longer than that of residential loans. This is mostly due to the fact that commercial property appraisals are far more in-depth and require more time to complete.
Still, some lenders are able to work faster than others. While banks can take several months to complete a transaction, alternative lenders are able to provide funding in a matter of weeks.
If you are pressed for time, it may make more sense to accept a slightly higher interest rate from an alternative lender in exchange for a shorter transaction process.
A lender should be able to give you a good idea of their transaction speed. If their answer doesn’t match with your expectations, it may be a good idea to cross them off your list.
What Expertise Do You Have in My Market?
Does the company have expertise within your specific area of commercial real estate? This expertise can help to ensure you get the guidance required when financing a loan through the company. Look to the firm's team and find out if they have the necessary background to support your commercial real estate goals.
By reviewing the questions and answers in this post, you will be better equipped to move forward with your commercial loan process. To learn more about the steps required in commercial lending, call us today.