What Information Do I Need to Get a Quality Commercial Mortgage Quote?
Most people when looking for commercial financing are not familiar with the lending process. While they think they are getting solid quotes while they provide little information; most people are only getting "empty" quotes.
What is an "empty" quote?
An "empty" quote is a quote that a mortgage broker will provide without seeing any financial information. They are usually quoting "best case scenarios" and do not take into consideration everything needed for a commitment letter from the lender.
These quotes can be misleading and waste a lot of time and money because the mortgage broker will usually want a deposit check to move forward. The deposit check will be used to order third party reports. When all of the financial information is collected and a problem is found, the lender may decide that they no longer wish to move forward with the loan after you have paid for the third party reports. Even if you find another lender to move forward with, they will usually require that they order the third party reports and you will have no choice but to pay for them again.
Commercial underwriters need a few things to be able to review a real estate transaction and analyze the risk associated with the project. By collecting these items beforehand, you will be able to make copies and submit a complete package to more than one lender. Now, instead of waiting on one lender who has limited information, you now have a few lenders who can give accurate quotes which will be lower because they will be competing against each other to get your loan.
Depending on the type of property you are buying you should have the following information available and ready to submit upon demand:
Personal Information:
- 3 years personal tax returns
- Personal financial statement (Go to www.usmortgageaid.com to get forms) a 1003 residential application or an SBA personal financial statement may be used
- 3 months bank statements verifying assets listed on personal financial statement
Owner-User Properties:
- 3 years business tax returns
- 3 years business financial statements + interim (year-to-date) business financials
- Business debt schedule
- Pictures of the property
Investment Properties:
- Current rent roll
- 3 years historical operating statements
- Copies of current leases with options
- Pictures of the property
Available information is the key to getting strong quotes. Get better rates, get better programs, save more money. BE PREPARED!
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