Are you a “boomerang” borrower?
We see this everyday in our office: A borrower approaches us looking for bank rate financing despite the fact that he’s already been turned down by his local bank. He’s got poor credit or poor cash flow or some other issue and can’t get bank financing at the point. We’re able to find a solution but he decides to keep looking. Months go by and the same borrower is now calling us in a panic. He got turned down everywhere he went and now his mortgage is maturing and he’s facing a default and/or a foreclosure situation. We call these borrowers “boomerang borrowers.” We know they will be back when they first walk out the door.
We understand. Despite our promises of speed and execution, borrowers and investors are always looking for their best deal. It’s often not until a borrower is faced with a harsh reality in the form of a bank turndown do they understand where we are coming from. You can avoid these scenarios by being honest about your financing request. Let’s talk about a few important items:
1. How’s your credit? If you’ve got a 600 credit score or perhaps mortgage lates, you can pretty much rule out traditional financing sources. Banks are going to want borrowers to have at least a 650 FICO before they can even entertain the request. Even at that level, you might be looking at an uphill battle and an even greater level of underwriting. Remember: we are talking about commercial real estate financing not owner occupied residential real estate. Maybe there is a bank that will fund you at a 605 FICO but do you really want to put that time and effort into a maybe?
2. How’s your cash flow? So maybe you’ve rehabbed your property and it’s half leased. Perhaps, your business is not yet expanding but you need to refinance your mortgage now. If cash flow is a problem for you, its also a problem for your local bank. If the business or rental income cant support the debt, you can’t expect the bank to support your loan request.
3. What does your property say about the loan request? Is it in a rural location? Are there any environmental concerns? Is it special use or is it something your bank doesn’t lend on? These are all important questions that you should ask yourself when you’re thinking about applying to your bank for a loan.
If you have any of these issues above, your loan request is going to be a matter of “who” will fund the loan and not at what interest rate. Rate should be important but in scenarios like these, execution takes priority.
If any of these issues describe yourself or your property, we can help. For over 10 years, Evergreen Equity Partners has been helping borrowers fund their commercial mortgages quickly and easily. Contact us today for a no hassle quote on your next mortgage. Email us at firstname.lastname@example.org or call us at 888-963-3096. Option 1 for new loan requests.