Commercial Mortgage Advice
Are you considering buying or remortgaging a commercial property? Owning an estate can be a great starting point, if you are planning to expand your business.By opting for a commercial mortgage, you will not only be increasing your property value, but you also get rid of the dispute of locating a property to rent.
A commercial mortgage, also known as a ‘commercial property loan,’ is a type of mortgage that can be secured against any public estate. Such estates are usually to run a business or act as an investment such as a building of offices or a block of flats.
Commercial mortgages can be pretty tricky, so it is best to have a good mortgage advisor on your side. At Care Financial Services, we specialise in commercial mortgages and provide high street and niche, specialist lenders.
We use all our resources to make sure our clients get what they have set out to achieve. You got to call us now to get the ball rolling on your commercial mortgage journey.
NOTE: We work, as introducer, with a number of reputed, well established mortgage brokers to offer mortgage services at the best possible rates who will assist you in finding the ideal home and securing the right mortgage by utilizing their in-depth expertise in estate agency mortgage services.
More About Commercial Mortgages
You must know all the details related to a commercial mortgage beforehand, as it makes the process much more accessible and straightforward. So, we have briefly listed down some details about commercial mortgage procedure, requirements and lenders’ assessment criteria.
How Does It Work?
Now that it is clear what a commercial mortgage is, many people wonder how it works. Our team works towards getting you the best rates and deals available for commercial mortgages that suit your individual occurrences.
A commercial mortgage lasts up to 25 years; however, the time may vary depending on the amount borrowed and the deposit made. Primarily, lenders will allow you to borrow up to 70% of the valued estate. Like a standard mortgage, you must repay your commercial mortgage in monthly instalments. Similarly, like a standard mortgage, commercial mortgages also require a deposit amount. Lenders allow you to use any property you own as a deposit or security against the new estate.
Furthermore, Commercial mortgages can also be available on an interest-only basis where each month, you only have to pay the interest amount. However, when your mortgage period ends, you will have to repay the entire amount of the mortgage at once. The interest rate for a commercial mortgage may fluctuate due to several reasons:
- The property type
- LTV (loan-to-value)
- Repayment criteria
- Loan size
- Credit history
- Annual income
- Type of mortgage
- Occurrence and profitability of the business
The duration of a commercial mortgage can be as short as three years and, in sporadic cases, can go up to 40 years. However, the most common duration is 15-30 years, with 25 years being the standard duration.
Discuss your case with our mortgage advisor at Care Financial Services so that we can come up with an excellent plan for your commercial ambitions.
Why Would I Need a Commercial Mortgage?
We have documented a few reasons for you requiring a commercial mortgage to make it simpler for you to understand:
- If you are a self-employed owner of a business who is looking to purchase a property to use for trading, then you may require a commercial property.
- Secondly, if you are a commercial investor or a residential property owner, you may want to buy a property to rent out to another business you do not own.
- Thirdly, if you are a commercial or residential estate owner, you may want to remortgage an existing property against a cheaper mortgage
Properties That Require a Commercial Mortgage
We have listed down some properties that can be used as security for a commercial mortgage:
- Restaurant
- Convenience stores
- Office buildings
- Retail shops
- Factories, storage units, or warehouses
- Nursing Homes
- Industrial units
- Medical clinics
- Veterinary clinics
- Funeral parlours
What Do Lenders Assess When Looking Into a Commercial Mortgage Application
There are a few areas lenders focus on when assessing a commercial mortgage application which are:
- Their annual income
- The business of the tenant
If you are a self-owned business person, then you will require
- Evidence of identity and residence
- Solid indication of your annual income
- Financial accounts and documents of your business from the last three years.
- Trading accounts from the last three years
- Bank statements (both business and personal) from the last three months
If you are a commercial estate investor, then you will require
- Evidence of identity and residence
- Solid indication of your annual income
- Copies of lease agreements. If you are a vacant commercial investor, you will find some lenders who can help you, but they may have stricter criteria, and such leaders are tough to find.
- Confirmation of rental income and yield of existing properties.
If you are a residential estate investor, then you will require
- Evidence of identity and residence
- Solid indication of your annual income
- Copies of any previous rental contracts
- Confirmation of rental income and yield of existing properties.
Get in touch with Care Financial Services today so that our team can discuss the requirements for a commercial mortgage in detail with you to get your desired mortgage.
Stress-Free Advice
Our friendly & personable advisors offer you a free impartial mortgage advisory service from start to finish.
Market Flexibility
We ensure we'll find the best deal available for your circumstances regardless of which lender it comes from.
Choose your Mortgage
Our experienced financial advisors compare over numerous products to find the one best suited to your needs.
Quick and Simple
We can avoid many of the delays often encountered when searching for your own loans and get things processed quickly.
How Can Care Financial Services Help?
At Care Financial Services, we house some of the best mortgage advisors in the UK with experience in helping our clients with both personal and corporate-related mortgages. We provide our clients with some of the best deals on the market, along with exclusive deals that are not openly available in the property market.Our experience in the commercial mortgage market gives us access to high-street and niche lenders with whom we can negotiate the mortgage terms on your behalf and put together simple and complex leading terms to provide you with some of the best deals.
Furthermore, we put your entire property portfolio under one single package, allowing you to get your hands on some of the best commercial mortgage deals across all your estates. So, get in touch with us today to make this daunting process of securing a commercial mortgage much more straightforward.
First Time Mortgage - Eligibility
Age
You should be at least 18 years at the time of the mortgage.
Deposit
You need at least 5 to 10% of the property value depending on the situation
Credit Score
You should have the bank specified credit score.
Frequently Ask Questions
If you have a question that deals with clients, customers or the public in general, there is bound to be a need for the FAQ page.
The average length of a commercial mortgage is five years.
The minimum deposit is 25%, but most applicants put down extra deposit amounts, often between 25-40%.
The average commercial mortgage rates start from 2% for minor loans, and for larger loans, it goes up to 12%.
Commercial and residential mortgages work more or less the same way; however, there are a few differences:
- Any estate that is used for security can only be used for commercial use or a mix of both commercial and residential purposes.
- You can not get a commercial mortgage on a fixed rate
- Commercial businesses usually come with a higher interest rate and higher risk than residential mortgages.
- In a commercial mortgage, the DIP (decision in principle) is always a verbal commitment.
- The time frame of a commercial mortgage is between 5-12 weeks which is much more than a residential mortgage.
Yes, you can live in a commercial estate, but only if involves a mixture of commercial and residential bases. Neverthless, it is still a good idea to analyze this concern with your lender beforehand.
No, you can’t use a commercial property for residential purposes. Lenders consider commercial estates much more riskier than other properties; that is why the procedure for such a mortgage is different than any standard mortgage. If you do take out a residential mortgage on a commercial property, it will be considered fraud, and you may also be at risk of repossession. If it is a case of a mixed-purpose mortgage (commercial + residential), the lenders will only consider the mortgage if less than 40% of the property is used for commercial purposes.
Getting a multiple property loan is known as cross-charging. Cross-charging is very common for businesses that operate from different locations. Care Financial Services can help you secure this type of loan, so speak. Please speak to one of our professionals to attain the goals of your corporation plans.
Disclaimer:
The content on this page is based on our understanding and knowledge at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. Please contact us if you require further information about the content included on this page.
Contact us
94 Street Lane, Roundhay, Leeds, LS8 2AL
0113 518 1624
lnfo@carefinancials.co.uk