Commercial Mortgages and Re-Mortgages
A commercial mortgage is similar to a normal house mortgage, except it is taken out by a business and used for a business. The business can be a Ltd company, plc or a sole trader. Buy to let also comes under commercial mortgages as do small corner shops and salons.
The main difference of commercial mortgages to house mortgages is the LTV. (loan to value) That is the amount borrowed to the value of the house. In a normal case this is typically around 95%, but some building societies go up to 100%. Commercial companies do not lend as much as that. So you would normally need to find a larger deposit. Commercial mortgage companies normally lend around the 75% mark stretching out to 85% in some cases.
Commercial mortgages are taken out for lots of reasons. You may be wanting to start a business in a workshop, warehouse or a corner shop. You could be taking over a public hose or even an hotel. All would require a commercial mortgage. Buy to let also come under this category. That is if you want to buy a house to rent out to someone.
A lot of mortgage companies have set and similar type of criteria. That is you will need accounts, a good deposit and a clean back ground. If you do not fit into this, you would normally not get the mortgage. But if you shop around you can get some companies that are not so set in their criteria. That is they will look at each individual case on its own merit. Some will accept past arrears, ccj’s etc. Some will even take the mortgage over 30 years. Giving you a lower repayment. Helpful when you are just starting up in a business, or cash is tight. They can even re-mortgage your commercial property freeing up equity for you and releasing some valuable cash back into your business.
Howard Burton is a Commercial Mortgage consultant. Finding Commercial Mortgages for the ordinary people that some times may find it difficult to get a commercial mortgage. Please visit
industrymortgages.com industrymortgages.com
