Two questions regularly come up when choosing a firm to manage your commercial and multi-family financing needs. What is a full service mortgage banking company and why is it so important to pick the right firm to service your needs?
What is a full service mortgage banking company?
Loan brokers don’t maintain the same kind of relationships with lenders that mortgage bankers do. The service that a mortgage broker extends doesn’t offer the same value as a mortgage banker. An experienced mortgage banker will have a long-standing history and proprietary relationship with lenders who can offer rates and terms unavailable to independent brokers.
A full service mortgage banking company will not only have proprietary relationships with lenders, but they service loans for those lenders as well. Typical loan services include cashiering, insurance review and consulting, managing of impounds or holdbacks (for taxes, insurance, tenant improvements, and leasing commissions), property inspections, and operating statement/rent roll analysis.
Why is it so important to pick the right firm to service your loan?
Closing a commercial real estate loan is an extensive process. It requires excellent market knowledge, skillful underwriting, a comprehensive understanding of legal entities, leases, legal documents, escrow, title, insurance, and much more. It is important to hire a team that has in depth experience in all aspects of the process.
Reputation and relationships matter. Commercial real estate finance is a relationship business. Trust, past track record, and knowledge are traits that help get loans closed that otherwise may not be possible. When problems arise, borrowers can have the benefit of leveraging the strength of their mortgage bankers, including their experience, relationships, and expertise.