Commercial Real Estate Mortgage Financing Dilemma
“When You Have Two Potential Commercial Real Estate Mortgage Offers, Which One Do You Choose?”
The dilemma with commercial real estate mortgage financing is which lender to pick and which offer to go with, assuming you have more than one offer for commercial mortgage financing to consider.
Or if you have an offer in hand, do you try and locate a better offer before making a commitment?
I say that this is a dilemma in that assuming you have a decent piece of property to finance and an even ok financing profile, there are going to be lenders who are going to be interested in providing you with mortgage financing.
The challenge is not getting someone interested. The challenge is getting the deal funded and funded in the time you have to work with.
What most business owners don’t realize is that no matter how large the lender, or how well the application process has gone so far, or how good the term sheet or even commitment contract sounds, the financing process isn’t over until its over.
Its hardly uncommon for deals to fall apart after all the commitment documents have been signed, when the finish line is already in sight. This type of result can be devastating in a number of ways, most of which are financial.
So when trying to decide on which option to pick here are some things to consider.
First, identify an acceptable range of rates and terms. If anything falls within the range, then it needs to be seriously considered.
Second, if you’re starting to get pressed for time, and have an option in the acceptable range, you need to seriously be considering accepting it, especially if its well along in the due diligence process. Many times, the best deal is the deal that can get funded in the time you have, provided it falls within your acceptable range.
Third, lender reputation for getting a certain type of deal in terms of size, location, and industry funded can carry a lot of weight and should be strongly factored into the decision making process versus being overly fixated on the lowest cost offer from a commercial loan provider who hasn’t placed a similar deal in several years or ever.
The best way to not only pick the best commercial real estate financing option, but make sure that the process to funding is well managed, is to work with an experienced commercial mortgage broker.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel