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Commercial Mortgages - The Facts |
By:
David Grooms |
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A commercial mortgage is very similar to a personal mortgage. The only real difference is that a company will make the purchase rather than an individual.
Unlike residential mortgages - commercial and semi commercial lending falls into a very strict lending criteria. Commercial lenders are not your normal high street building societies.
The main high street banks will offer simple commercial mortgages, but the lending criteria are often very strict. There is however specialist commercial brokers and commercial banks that have a much more relaxed lending criteria.
The maximum amount that the lender will typically give is normally 85% of the purchase price. However 100% deals are available with extra security.
The length of the mortgage can be anything between 1 to 30 years. You can choose to have a repayment mortgage or interest only.
Like residential mortgages there are always special deals available and you can choose between a variable or fixed interest rates.
The process is very simple. You first complete a very simple application form (one A4 sheet) this will provide enough information for the lender to give you a 'Decision in Principle'. This is a letter from the lender detailing the terms and rates of the mortgage based on the information you have provided.
Assuming you are happy with the 'Decision in principle' offer you will be asked to complete a formal application. This requires a lot more detail information about the business and the property.
Before the lender makes a formal offer the property/business needs to be valued. If any issues arise from the valuation or formal application then the lender may withdraw from the deal or change the terms offered on the 'Decision in Principle'.
You are now ready to pass the deal over to your solicitor. They will complete the paperwork and transfer the funds.
Sovereign Commercial Finance are a specialised commercial mortgage broker operating throughout the UK. This article is available as a unique content article with free reprint rights.
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Article Source: http://www.statssheet.com/articles/article54919.html |
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