Commercial Mortgages

Whether you are buying a business, raising money to pay off debts, looking for a cheaper interest rate or expanding your business, a commercial mortgage is what you may be considering. Would like to know some commercial mortgage secrets.

Do we really understand what commercial mortgages are and where we should go when considering taking out a business loan. The UK commercial mortgage market ranges from the big four prime lenders who require full accounts and balance sheets, to niche lenders who will not require any accounts whatsoever. Obviously, the better the accounts and net profit, the cheaper the rates charged.

As with domestic mortgages, commercial mortgage borrowers should take great care about the rate of interest paid on the mortgage but as well as this they should also view all additional fees being charged. Basically, the bigger the loan amount the more interest rate sensitive the loan amount becomes.

The mathematical calculation below illustrates this nicely:

A commercial loan arranged for 500,000 with an interest only loan of 7% would cost 35,000 pa or 2,916.67 per month. A small reduction of 0.5% making a pay rate of 6.5% would reduce the annual pay rate by a massive 2,500 pa.

As UK businessmen, we tend to go cap in hand to Banks and Building Societies when considering a business loan or commercial mortgages but realistically it should be the other way round and they should be fighting for our business by offering us the best commercial loans, at the lowest possible interest rates. Thats all well and good you might say but how do we do this?

An underused professional here is the commercial mortgage broker. A whole of market commercial mortgage broker can deal with all the high street lenders but they can use their experience and expertise to introduce the most suitable lenders for niche areas to suit clients needs. Not only that but they can negotiate directly with the lenders on your behalf and come back with the cheapest loans to suit the individual, as they know all commercial mortgage secrets.

Once you have the commercial mortgage broker on board and your needs change, they can then move existing mortgages around according to other lenders, with a view to reducing interest rates and maybe shortening the mortgage term as a consequence.

* Are you looking for a development loan?
* An improvement loan?
* Buy your own property?
* Buy to Let offices?
* A conversion loan?
* Buying property in an auction?
* Renovation Loan?
* Want a commercial mortgage?
* A Commercial Remortgage?

The areas of need of a businessman are endless and a good commercial mortgage broker here would pay for his services ten fold.

Self Certification Commercial Mortgages:

The term self-certification was introduced over a decade ago to help the self-employed to self certify their incomes. Today this same concept exists in the commercial sector for sole proprietors, partnerships and a Limited Company.

Whole of market mortgage brokers know that individuals should be treated on their own merits and also know that it is not a perfect world. There will be times of hardship, losses incurred and as a consequence a business may incur adverse credit problems. Regardless of these problems a business has to survive, prosper and expand to the best of its ability and with this in mind they have developed strong links with lenders who will take all these previous problems into consideration and lend up to 85% - 95% of the property value, without the need for accounts or an accountants letter.

Self-Certification has limits: most lenders will only allow you to prove your income in this way if you want to borrow up to 75% loan to value, so you will need to put down a substantial deposit. However, some lenders may allow the self-employed to borrow up to 85% - 95% on a self-certification basis and the commercial mortgage broker is there to help by finding the cheapest and the most flexible commercial mortgage loans.

Commercial mortgages are complicated and the businessman is usually busy trying to make a crust and improve profits. For this reason the search for the best loans and cheapest interest rates should be left to the whole of market commercial mortgage broker.