Commercial Mortgages

A commercial mortgage is in principle like a residential one. In both cases the lender will assess the applicant to ensure they have the means to repay the property loan and evaluate the security offered to ensure they can to repay their debt should it come to repossession.

Commercial investment mortgages are specifically designed for individuals or businesses looking to purchase a property as a business asset, in order to profit from rent and property value appreciation.

Some of the more lucrative commercial investments include shopping centres, industrial estates, agricultural land and office buildings. From a lender’s point of view, there are two key factors to consider:

  • The calibre of the tenant – This determines the yield and thus the value of the asset.
  • The borrower’s security – Lenders will usually insist on a signed personal guarantee on any loans, which gives the bank permission to go after the borrower’s personal assets if the business fails to pay back the loan.

Rates for business mortgages are dependent on experience, track record, industry sector and the strength and performance of your business or the business you are considering.

Competitive terms are available for business owners although be prepared to move your business banking to achieve the best terms available. Commercial mortgages from more specialist lenders tend to be priced higher, but they won’t want your business banking.

Commercial mortgages are typically set at an interest rate just above the Bank of England’s, and loans are generally available for up to 75% Loan-To-Value. Loans can be structured in many different ways: onshore, offshore, company name, LLP, or trust.

Funding is available from £100,000 to upwards of £100 million, dependent on the project.

Our Mortgage Broker can source competitive rates from across the market. We have built relationships with specialist mortgage lenders who do not have a presence on the high street to secure finance where others cannot.

Contact the commercial finance desk for a no obligation chat today.

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Getting a mortgage FAQs

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What is a Mortgage?

A mortgage is a loan from a bank or building society that enables you to purchase property. The loan is repaid with interest over a number of years, with the term for doing this dependent on your personal financial circumstances.

A mortgage can be held by an individual or jointly between one or more people, but if you do not keep up your repayments, your home could be repossessed by the lender.

Will i be accepted for a Mortgage?

All mortgage lenders have their own criteria. The following factors all play a part in determining their mortgage offer and how much they are willing to lend to you:

  • Amount you wish to borrow
  • Size of your deposit
  • Employment status and income
  • Credit rating
  • Outgoings
  • Existing debt
  • Your age
  • Length of the mortgage term
  • Your credit status
  • If you are applying solely or jointly

In order to be accepted, you need to convince lenders that you are able to repay your mortgage. To do this, lenders typically use your credit report to check your repayment history. Your credit file will contain current and existing records on items such as credit cards, loans, overdrafts, mortgages, mobile phone/s, some utilities payments and all accounts opened in the past six years. If you have had arrears, defaults, CCJs, debt management plans or previously been made bankrupt, there are mortgage options available which we can help you with.

How does the Mortgage application process work?

To get a mortgage, you will need to save a deposit of at least 5%. However, the more you can save, the better your rate will usually be. If you already own your own home, you can use the equity in your property for this. Our expert mortgage advisors can talk you through the benefits and the difference in your monthly payments by increasing your deposit.

 Once you have found the property you want to buy, our mortgage brokers will assess your personal needs and circumstances and recommend a mortgage product that is right for you. They will compare hundreds of mortgage quotes, including a number of exclusive products that cannot be found on the high street or comparison sites, and ensure that you get the right deal at a great price.

 If you are happy with the mortgage product your advisor recommends, you will then receive an Agreement in Principle (AIP). This will give you an approximate sum of how much the lender is willing to let you borrow, and enable you to put an offer in on your dream home.

 If your offer is accepted, you will need to appoint a solicitor to handle searches, surveys and contracts, which we can arrange for you. We handle the entire mortgage application process through to completion, liaising with your solicitor and lender to ensure that your application is a success.

 If you are looking to remortgage, then we recommend looking for a new mortgage deal around 3 months before your current deal expires. Starting early will give you plenty of time to compare all the available mortgage products and submit your application. If your mortgage is approved early there’s no need to panic, as we will ensure that the completion date corresponds with your current deal’s end date.

How much can I afford to borrow?

Most mortgage lenders will lend you up to five times your salary. However, this is dependent on a number of factors including your age, number of dependants and current financial commitments. Lenders generally work out how much they will lend you based on what you can realistically afford each month after you have paid your bills, credit cards, loans etc.

Our Mortgage Broker can help you understand how much you can realistically borrow before an application or credit search is completed, by assessing your individual needs and circumstances. If you choose to proceed with an application, then our advisers will know which mortgage lenders to approach to ensure you get the required loan amount.

How much deposit will I need?

To buy a home with a mortgage, you will need to save a deposit of at least 5%. The more you can save, the better your mortgage rate will be. There are a few exceptions to this however as follows: 

  • If you already own a home, you can use the equity from your property for the deposit
  • If you are a council tenant and are looking to buy your current home under the Right to Buy scheme, most mortgage lenders will now accept your Right to Buy discount as a deposit.

With property prices increasing, first time buyers are struggling to save enough money to buy a home. The government has therefore introduced ‘Help to Buy’ to enable first time buyers to get on the property ladder.

Our professional mortgage advisors are experts on all the various mortgage deals available and can help you decide which mortgage deal best fits your needs

Can i get a mortgage with bad credit?

If you have a history of bad credit including; arrears, defaults, county court judgements (CCJs), debt management plans or bankruptcy, there are still mortgage options available. Your choice of mortgage lender and type of mortgage will however be limited, and the rate of interest will be higher than someone who has a good credit rating.

Our expert mortgage brokers are in regular contact with adverse mortgage lenders and are well placed to advise you on all your available options.

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