Increase Your Chances for Loan Closing for 2024
5 –UNDERSTAND YOUR BORROWER’S NEEDS AND DESIRES COMPLETELY.
This has to do with the Borrower’s Motivation . Why does the Borrower need the loan – is it a refinance for additional investment or working capital; a new loan needed for a quick closing on a discounted property purchase; or a bailout of properly headed for foreclosure?
4 – EDUCATE YOUR BORROWER ON MARKET REALITIES.
Nobody wakes up in the morning thinking that they’re going to have to pay 12.75% interest and 4 points to obtain a 12 month loan. But allowing your Borrower to continue to harbor hope for unrealistic terms will only delay or kill any deal on the horizon. If your Borrower only qualifies for Hard Money or Private Money then inform the Borrower of such and explain why. Perhaps corrective action can be taken that will allow the Borrower to refinance after 12 months at a much lower rate.
3 – EDUCATE YOURSELF ON FUNDING ALTERNATIVES AVAILABLE, WHAT IT TAKES TO QUALIFY FOR THOSE LOANS, AND HOW YOU SUMMIT A LOAN TO HARD MONEY/PRIVATE MONEY LENDERS.
Look, the worst case scenario is having to Co-Broker the loan with a Broker that has a relationship with the lender providing the loan you seek. Why the worst case? Because at best you receive half the commission and in reality you more often get less than half as a “Referral” Fee.
2 – DO NOT ALLOW THE BORROWER TO LET A LENDER’S TERM SHEET “AGE”.
The Borrower needs to make a quick decision to either accept or reject/counter the Lender’s offer. Too many Borrowers think they can “shop” the Term Sheet through other Brokers and the offer will still be there when they realize no other financing is available. By that time, the Lender has likely lost interest, funded another deal, or has changed the underwriting criteria and the offer is no longer valid.
1 – OBTAIN COMPLETE INFORMATION FROM THE BORROWER, AND FORWARD ALL OF IT TO THE LENDER.
Yes, forward the good, the bad and the ugly. When the Lender finds out on his own about negative information (and the Lender will) it will kill the deal – even if the Lender could have worked with the information if it had not been withheld. If as a Broker you submit a complete file – financials, title, survey, property history, filings and reveal any problems, then loan offers will survive to closing. Even if a Lender issues an LOI or Term Sheet, if it’s based on incomplete information the offer will likely be rescinded once further information is obtained.
Private Mortgage Financing Partners are experts in financing hard to finance deals (hard money, private money) through our mortgage fund, Private Mortgage Investors, LLC. We are also experts in negotiating discounted payoffs and discounted note purchases with banks, as we also own a commercial debt negotiation company.
Learn more details or to discuss a possible commercial mortgage contact us,
Private Mortgage Financing Partners.