Here’s a story about how hard it’s become to secure commercial mortgages, versus 2 to 3 years ago. (See Lender Loyalty by Orillia Today)
In it, Chris Doughty, of Dominion Lending Centre, offers a few sage tidbits; namely:
Don’t make idle threats…
Doughty says: “You don’t want to try to bully the bank into giving you a better rate because it might backfire on you. It might have worked two or three years ago, but it doesn’t work today.”
Don’t get impatient…
“Sometimes customers are their own worst enemies,” says Doughty. “People get impatient and get other brokers involved. Then all these brokers are shopping the same deal – eventually the deal runs into itself. Lenders think it’s credit seeking and wonder what’s wrong with the deal – and then no one will want to touch it.
Depending on the deal, it can take up to 10-30 days or more to find a commercial lender who can provide a suitable letter of interest (LOI). Then, the full due diligence stage begins, which takes even more time.
Make sure you factor in that timeframe and make sure you find a commercial mortgage specialist. Commercial financing is a whole different animal. Residential mortgage brokers generally don’t have the experience, skills and contacts needed to efficiently service commercial clients.