Do you need funding to buy a property wherein to establish your place of business? A commercial mortgage broker can help you get a loan from financial institutions.
A commercial mortgage broker’s task is to look for mortgages that will work for their client’s real estate projects. In order to do this, they must first work with their client so they can determine things like how much money they need, what type of loans they will qualify for and what underwriting considerations will have to be established. This information will then be taken by the commercial mortgage broker so they can search their databases for lenders and private investors who will be interested in this kind of commercial real estate venture proposed by the client. The investor’s interest also varies because there are some who are interested in the rehabilitation of commercial properties while others are more interested in investing in mortgages for purchasing of existing commercial spaces.
Types of Commercial Mortgages and Brokers
There are several types of mortgages, and just like residential mortgage brokers, commercial mortgage brokers can also specialize in a few types of mortgages. Basic commercial mortgage is the first type of commercial mortgage. This type of mortgage deals with purchases of commercial properties which could either be rental of homes or office spaces. Exotic loans is the second type of mortgage that commercial mortgage brokers can specialize in, which include interest only mortgages and balloon mortgages. In an interest only mortgage, you will only have to pay the interest on the loan for up to five years. After which your balance will be re-amortized for the remaining duration of your loan. On the other hand, balloon mortgage will amortize your loan over a duration of 30 years. But after 15 years, your loan will expire and you would have to make a payment for the remaining balance. The last type of mortgage that can be specialized by a commercial mortgage broker would be the jumbo commercial loans. These types of loans are for properties or real estate projects that are valued at $500,000 and above.
Commercial mortgage brokers come in different sizes. They can be composed of several commercial mortgage brokers plus a support staff or it can be just a single broker. The advantage of single mortgage brokerages is that it allows the broker to earn all the commissions and fees from the sales but on the other hand, a multi-brokers business has the advantage of attracting more clients, thus the brokerage is able to hire more people as support staff, get a larger office and many more other conveniences for his employees and the business itself.
If You’re Thinking of Becoming a Commercial Mortgage Broker
The benefits of becoming a commercial mortgage broker come in many ways, the first of which is working for yourself if you choose to and that will allow you to work from home if that is what you want. Second, the income is quite good as long as you really exert effort to advertise or promote your business and put in the hours required to meet your clients’ needs. Third, commercial real estate is more stable compared to residential real estate that lenders are more open to invest in such an industry.