The commercial corner: Build your credibility by submitting applications correctly Mike Boggianocommercial mortgage, commercial loan application, loan submission package
The Mortgage Press is pleased to present "The Commercial
Corner," a monthly column by Mike Boggiano of Silver Hill Financial
LLC dedicated to answering your questions about the commercial
mortgage marketplace. If you have a question that you would like
answered in a future installment of "The Commercial Corner," please
e-mail [email protected]
Q: Can you offer advice on the correct procedure for
submitting a commercial loan application?
A: Perception is reality with lenders when it comes to
your commercial loan application. Proper presentation of a loan
submission establishes your credibility at the start of the process
and demonstrates your commitment to the transaction. A
well-organized, complete loan file that is properly stacked and
tabbed for the specific sections will differentiate your level of
professionalism from that of other brokers. Your file will receive
preferential treatment from a lender when compared to those that
are incomplete or disorganized.
Q: What should my loan submission package include?
A: A well-organized, complete package includes the
•The loan application. The full
application needs to be completed at the time of submission.
Omitting information then adding it to subsequent sections of the
presentation indicates to your lender that you lack control over
the borrower and the transaction. The application needs to be
verified for accuracy and consistency with other documentation that
is provided such as: ownership entity, borrower's income,
borrower's assets, subject property address, property occupancy and
income, employment, assets, purpose of financing, payoff amounts,
terms of the purchase and sales agreement, and credit.
•The rent roll. The rent roll should include
all rental information concerning tenants of the property. This
includes the name of each tenant, square footage occupied, monthly
rental amounts, term of the lease, operating expense escrows and
scheduled rent increases.
•Purchase and sales agreement (if
applicable). The agreement should be in full force, in
effect and not expired. If expired, provide an extension addendum
that permits sufficient time to secure financing on the
transaction. The contract itself needs to be complete and verified
for accuracy. The purchaser(s) listed on the sales contract should
match the borrower(s) on the loan application, and the property
address on the contract must match the application. Finally, ensure
that the sales price and financing terms on the contract match the
application. Disclose any concessions granted within the
•Operating statements and tax returns for the
property, and the borrower's tax returns. At a minimum,
include year-to-date operating statements on the subject property
plus those from the previous two years. In addition, two years of
tax returns for the property (if the borrowing entity is a
corporate entity) and for the individual borrowers are
•Interior and exterior photos of the subject
property. The old saying that a picture is worth a
thousand words definitely applies in this case. Photos give your
lender a feel for the physical attributes of a property.
Q: What are some tips for working with a borrower who is
not forthcoming with accurate information in a timely manner?
A: You can typically gauge a client's commitment to the
transaction by their cooperation level right from the beginning.
Borrowers who drag their feet in providing the upfront information
necessary to receive a pre-approval will likely present the same
challenge during the underwriting process. Respecting your lender's
valuable time and resources will help to further build your
Mike Boggiano is senior vice president, national sales
manager for Silver Hill Financial LLC. He may be reached at (877)
676-1562 or e-mail [email protected]