How do you get a commercial mortgage?
A commercial mortgage is simply a mortgage that is granted in respect of a commercial
property, e.g., an office or retail building. It works in just the same way as a
residential mortgage, i.e., you repay capital and pay interest (interest only options are also available) usually on a monthly
basis. If you are interested in purchasing a building for use by your business we can help you get the best deal from amongst our panel of commercial lenders by negotiating on your behalf.
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What information is required?
If you are looking at purchasing a building through your business, then you must
provide details of the business and up to date audited and management accounts.
You must also be able to show how the investment will affect the business, e.g.,
if the business is already paying rent for a premises and this will be eliminated
with the building purchase, then this is a positive from the lender’s point of view.
Equally, if you are purchasing the building as a personal investment, the lenders
will need to see the kind of personal information that would be required for any
mortgage submission e.g., asset and liability statement and details of income and
expenditure.
Furthermore, lenders will need to look at the property itself and determine its
value and likely income. Generally, it is preferable that you would be able to demonstrate
a regular and secure income from the building, i.e., a sitting tenant with a good
payment history, ideally financially strong and tied into a long term lease (the
lease itself may need to be examined to explore exact terms).
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What kind of properties are suitable?
In principle, any building with a demonstrable income stream from a tenant is suitable,
including industrial, office and retail buildings. Any lender will need to be satisfied
that the building is structurally sound and that there is good title available.
Lenders may also be willing to finance a commercial investment where there is no
immediate prospect of rental return (e.g., development land), however, there should
generally be some exit plan and the borrower would generally need to demonstrate
a capability to carry the cost of servicing the mortgage while the site remained
undeveloped.
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For more information on all options available to you, contact one of our mortgage advisors today on 1890 462 462