A commercial mortgage works in a very similar way to the typical residential mortgages, however with this type of loan it enables you to buy one or more properties for the intention of using it for business purposes, or in order to rent out.
If you get a commercial mortgage, the loan will be secured against the property. The loan will be up to 75% of the property’s value. Depending on the lender, you may be able to use the equity that you have in another property to cover the remaining 25% as a deposit.
It is possible to get this type of funding to purchase:
How long do I have to pay the commercial mortgage? This will depend on the mortgage provider, but it can be a term of anything from a month, all the way up to 30 years.
How much can I borrow with a commercial mortgage? Typically lenders will allow you to borrow anything from a minimum of £50,000 and with some specialist lenders up to £40 million.
What fees do I need to pay for a commercial mortgage? There are a number of different costs you need to take into consideration when taking out a commercial mortgage. These include:
Which companies can get a commercial mortgage? It is possible to get this mortgage in your own name or alternatively if it is held by a:
What is considered in the mortgage application process? The lender will assess you against certain criteria, which will typically include:
Will my tenants finances be considered in the commercial mortgage application process? Yes, potentially, if you intend to buy the property and rent it out to tenants.
Does my company’s credit record matter? Yes, it will be taken into consideration when the lender decides to approve or decline your application.
Are commercial mortgages regulated by the FCA? No, but standard mortgages are.