With so many lending options in today’s commercial mortgage market, it can be difficult to know where to submit your loan request.
The fact is, different lender types are always going to be a better fit for certain borrowers. The best thing a lender can do for you is to clearly communicate the types of deals that meet their requirements or “fit their box.”
A good way to start the qualification process is to look at two important aspects: your property and your own needs. Here is a quick breakdown of the characteristics to identify as you search for the ideal lender option.
Perhaps the easiest way to see if you’re a great match for a lending program is to determine whether the real estate in question is listed as one of their eligible property types. You can most likely find this information somewhere on the lender’s website, though it may also be beneficial to reach out to a loan officer so you can get a better explanation of what fits and what doesn’t.
With the recent addition of 1-4-unit residential buildings, Commercial Direct’s (a division of Silver Hill Funding, LLC) lineup now includes the following property types:
This list is a comprehensive collection of the most common commercial and multifamily property types in the country. However, the list also includes some property types, like bars and restaurants, that many other commercial lenders avoid.
That brings us to commonly ineligible property types like churches, adult lounges, and funeral parlors. If you’re looking to finance one of these properties, you may be limited to hard money options and other high interest rate alternatives.
To see specific examples of the types of properties Commercial Direct lends on, head over to the showcase page of our website and scroll through a collection of closed loans.
Once you have disqualified certain lenders based on property type eligibility, your next step is to take a close look at your own short and long-term strategy.
To start, take an honest look at your credit history. If you have a high credit score and zero blemishes in your financial history, you may be able to secure financing from a bank. And when you consider the low rates and attractive terms banks offer, that is exactly what many in that position should do.
On the other hand, there are a number of instances where prospective borrowers do not want to work with a bank, even if they are bankable. Consider the self-employed professional who prefers not to go through the hassle of providing tax returns or the investor who needs to close in a matter of weeks, not months.
As an example, Commercial Direct works with a wide range of credit-worthy borrowers, from small-business owners who want to take cash out of their existing commercial mortgage to investors looking to diversify their portfolio by purchasing a duplex property.
These individuals are actually better served by working with a non-bank alternative lender. If that is the case for you, you can save time by eliminating bank options from your search.
The checklist below highlights the initial questions you can ask yourself as you look to find the ideal lender option for your loan request.
Take the first step by visiting our Loan Customizer and designing the loan that fits your needs.
Don’t let lender fees catch you off guard – here are all the fees you can expect from submission to closing.
Faster closings and more flexibility are just a couple ways partnering with a direct lender can be beneficial for your next commercial loan.
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