Commercial Mortgage Lenders

There are a wide variety of commercial mortgage lenders out there that make a wide variety of commercial mortgage products available to businesses.

The commercial mortgage industry is divided into three wide categories of lenders, banks, third party lenders and mortgage brokers. Each of these lenders offers a different kind of product to a different market.

Businesses will have to choose which kind of mortgage they want and which kind of mortgage lender they want to deal with. Different mortgage lenders often specialize in making mortgages available to firms in specific industries or businesses.

Banks

Banks are the first source of commercial mortgage lending that most people think. Banks generally issue commercial mortgages to existing businesses with excellent credit ratings and good cash flow.

Bank issued commercial mortgages can be hard to get because many banks have fairly stringent mortgage standards. Banks often refuse to loan money to new businesses, speculative businesses and entrepreneurs with histories of failure. Banks may also charge higher interest rates and high fees on their commercial mortgage products.

Some banks may be easier to work with than others; community owned banks and credit unions maybe more willing to work with business owners in the community for example. Locally-owned banks maybe more willing to work with local business owners.

Third Party Mortgage Lenders 

Most of the commercial mortgages around today are issued by third party mortgage lenders. These are firms that specialize in issuing commercial mortgages to businesses. Since commercial mortgages are generally these firms’ only business they are easier to work with and more likely to give you a mortgage.

Third party mortgage lenders often charge much higher interest rates and fees. They also make a wider variety of mortgage products available including floating interest mortgages and Adjustable Rate Mortgages.

Third party mortgage lenders are often more willing to work with new businesses and speculative businesses. A third party lender will be more likely to work with a business with a history of bad credit. Many of the mortgage lenders that operate on line are third party lenders.

Commercial Mortgage Brokers

Commercial mortgage brokers are individuals or services that connect business owners with mortgage providers. The mortgage broker usually takes an application from a business owner then shops it around to several different mortgage lenders to see if he or she can arrange a mortgage.

A mortgage broker is not a lender instead a broker sells mortgage products underwritten by other lenders. One advantage to using a mortgage broker is that they can provide a wide variety of mortgage options to a business. Mortgage brokers usually add a fee for their services to the mortgage when it is issued.

Some mortgage lenders including many online lenders act as both brokers and lenders. They may underwrite some of the mortgages they issue and sell some mortgages to other underwriters.