Commercial Mortgage Wholesale | Introduction to Commercial Mortgage Wholesale
Purchasing a commercial mortgage is an investment. But the return on that investment is dictated by the cost of the loan, in terms of both fees and interest rate. The lower these rates, the more you’re able to profit from the property, because more money goes directly into the property itself rather than the pockets of the lender.
But in order to get these low rates, you have to be the type of borrower that appeals to lenders. You can do that by:
- Investing more of your personal finances
- Maintaining a high credit rating
- Allowing lenders to profit in other ways
The last point is where commercial mortgage wholesale lending comes in. Unlike traditional commercial mortgages that are purchased by a specific lender, wholesale commercial mortgages are taken by a broker. Mortgage brokers do not work for any particular lender. Rather, they take all of the information about the loan, complete the underwriting, and shop it around to those that will get the best rates.
While this may seem like a “shady” practice, it’s actually one of the most beneficial for securing lower interest loans. That’s because with commercial mortgage wholesale loans, the costs and fees are passed down through the sale of these properties to the buyers, not to the borrowers.
The broker will then find a wholesale lender willing to buy the property. Brokers also tend to have a better understanding of the borrowing process and relationships with different lenders which allow loans to be tailored more to your needs, and in wholesale lending – because the borrowers and brokers are able to profit in other ways (rather than off of you), they are willing to offer better rates and lower fees than other forms of lending.
Commercial Mortgage Wholesale vs. Retail
If there is one significant weakness to wholesale lending, it is that you do need to find the right broker to handle the loan. The quality of your broker affects the quality of your rate significantly. But wholesale commercial mortgages are actually a profitable and effective way to purchase a commercial property.
If you’re interested in connecting with some of the best commercial lenders in the country, sign up with CRE Lender today. We’re not a lender. We’re not even a broker. We’re a company that ensures that you’re directly connected to those that can help you secure the best available rate for your commercial loan. Sign up for free today to learn more.
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