With the halfway point of the year fast approaching, home originators across the country take a step back and valuing their performance in the first 6 months of the year. Thanks to the increase in interest rates and the decrease in the applications of the home loan, which is a safe bet that several mortgage professionals have earned below they did at this point the previous year. If they will survive, these creators should do something to change in the second half of the year.
The problem is that supplementing the product offering of a mortgage company with new products and competencies requires an investment of time and resources that most residential originators – particularly those from the small business – just do not have. To make a change in the short term, originators have to identify a strategy that, although economic and simple to adopt, offers immediate opportunities for success.
Here are 3 paths in which mortgage companies and residential originators can incorporate business loans into their existing businesses, placed from the lowest to the highest level of participation.
Consult a Loan Partner
Residential mortgage companies already see a lot of commercial offers, so why not get extra income by collecting basic information and referring these offers to a business loan partner who can take the ball forward. Commercial loans are not easy, just referring business opportunities to a trusted partner is the simplest way to break into the industry.
Originators do not require additional training to begin and their work ends before the commercial transaction creates, which means that they can avoid the most challenging aspects of the business loan. If mortgage companies align with the right loan, they can make solid reference relationships that generate revenue without committing to large expenses or time investments.
Broker Commercial Offers
Mortgage companies that need to improve the income they can make from commercial loans with a reduced balance may wish to broker this transaction. This step involves some extra resources, but the opportunity for a higher return generate the investment value for several residential organizations.
It is essential to keep in mind that brokerage business transactions are different and more difficult than closing residential offers. The most common small commercial business involves multi-family buildings with more than five units. These behaviors are quite similar to investor transactions of two to four units that residential originators have been closing for years.
Start a Correspondent Relationship
The third option for mortgage companies that need to enter the commercial market contains forming a correspondent relationship with a commercial loan. Obviously, this option needs a greater investment of resources and time, however, companies that go this route have the chance also to make more income than they could refer or intermediation of commercial offers. Blank labeling or financing of small business tables also offer a great deal of control over each transaction.
Over time, commercial mortgages have developed because it is too difficult and time-consuming. Even though this may be the case with the great deals that make news on the front page, smaller commercial offers that local investors and small-business owners need are well within reach for originators. If residential originators partner with a quality commercial lender and select one of the 3 clear ways described here, they can position themselves for success in this year and beyond – even if interest rates continue to increase.