Question 1

Why is it better to use a mortgage broker vs. a direct lender like a bank?

Accepted Answer

Direct lenders only have one program, and you need to fit their box — they are in control. Not only do you have no comparison to know if their offer is competitive, but commercial lending is very specialized and many times there's a better-fitting lender for your goals. Working with a mortgage broker gives you access to a multitude of lenders, a broker-managed bid process to ensure the best rates and terms, with our experience and lender relationships set up to solve any problems that arise, and get your loan closed successfully and quickly — for no additional net cost to you.

Question 2

Am I obligated to work with you in order to see my loan options?

Accepted Answer

No, you are not obligated to work with us. Any conversations and due diligence performed to help arrange potential commercial loan options are a free consulting service provided by our company. We are confident in our abilities and track record, and especially in a purchase or 1031 situation would understand and welcome any competition. Upon selecting a program you will need to sign a non-circumvention agreement, however should you decide to cancel or take a different offer while in process, you will not owe any commissions or fees.

Question 3

What are your broker fees, and typical fees of a commercial loan?

Accepted Answer

The standard origination fee in the commercial mortgage market is 1.00% of the loan amount, paid by the borrower through escrow at funding and closing. If you didn't use a mortgage broker, the direct lender you work with would likely charge you that same 1.00% fee. When a mortgage broker originates the loan, common practice is that the lender passes that fee to the broker instead — meaning our services are a net zero cost to you. Other fees can vary depending on the type of request and lender, and can include property reports, processing, loan documents, legal review, and title/escrow charges.

Question 4

What will I be required to submit for loan options, and for loan approval?

Accepted Answer

For quotes, the more information provided, the more accurate and competitive those quotes will be — though we understand any privacy concerns, so what isn't provided is assumed qualified. At minimum, we'll need property information (rent roll, P&L, etc.) or business financials for owner-user requests to arrange soft quotes. Once in process, the funding lender would need various forms, historical cash flow, lease copies, proof of assets or liquidity, and likely tax returns.

Question 5

How many lenders is my request sent to? I'm concerned about my privacy.

Accepted Answer

CCG has access and experience with over 375 different lenders. Your loan request and personal information, however, isn't simply blasted to all of them. We respect your privacy and are much more strategic in our approach — after a complete review, our team zones in on a dozen or fewer lenders that, from our experience and market knowledge, we know would qualify and be aggressive on your request. Your information is encrypted when possible and shared with select lenders through secured channels.

Question 6

What is the general process from application to funding?

Accepted Answer

The first step is a consultation — we can provide general feedback and soft quotes the same day. For vetted loan offers, we'll need to collect documentation and information, which takes 2-3 days to work through. Upon selecting a loan option, you generally sign the offer and submit a good faith deposit, which the lender uses to order property reports. After underwriting completes and final approval is given, the remainder of the process is handled by the escrow company to coordinate funding and closing.

Question 7

How are commercial loans structured?

Accepted Answer

Most commercial loans are hybrids — fixed for a certain period (3, 5, or 10 years) and then adjusting annually to market rates until the loan is due, up to 30 years. Most multifamily loans are 30-year amortized and commercial 25-year. These loans typically carry a prepayment penalty if paid off early. Bridge and rehab loans are typically shorter term (12-36 months) with interest-only payments and minimal prepayment penalty.

Question 8

How is the maximum loan amount determined?

Accepted Answer

The maximum loan amount is typically determined based on the cash flow of the property — the current in-place rents and reported expenses, along with lender underwriting ratios that create a cash flow buffer. That maximum can be reduced based on minimum equity requirements or perceived risk. Owner-user properties don't have lease income, so the business's P&L is used for qualification instead. Bridge and rehab lending relies less on ratios, often using pro-forma projections instead.

Question 9

What are commercial mortgage rates right now?

Accepted Answer

Commercial rates are much harder to blind-quote than residential rates — they're investment loans and much more specialized, so a full review is really necessary for an accurate quote. In general, commercial rates run about 1%-2% above comparable residential rates for long-term programs, with bridge and rehab loans running higher depending on the request. We can give you a ballpark figure with some basic details during a consultation call.

Question 10

What types of lenders are active in the commercial mortgage market?

Accepted Answer

There's a variety of lenders active in the commercial real estate market — banks, credit unions and agency lenders (Fannie Mae, Freddie Mac, FHA) are active players, but so are life insurance companies, Wall Street conduits, private companies and individuals, web-based crowdfunding groups, and other types. Each lender type does better with certain situations and specializes in different areas, and we'll recommend the type best suited to your scenario.

Question 11

Do you lend on residential properties (1 to 4 unit residential properties)?

Accepted Answer

For the most part, no. Commercial is considered properties with 5 or more units; 1-4 unit properties are considered residential and handled by a different specialist, though we have a strong network and can recommend someone in your area. If you have a portfolio of residential properties, we can offer a commercial blanket loan on all of them cross-collateralized together, which we're happy to review with you.

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