Commercial Mortgages Explained
If you are thinking of buying a commercial property either to use as a business venture or to sell on as an investment then you are going to need a commercial mortgage. Just as there are many different types of property available for all types of business ventures there are different types of commercial mortgage.
The type of commercial mortgage you will get will depend on the type of business which you are intending to set up, for example solicitors, doctors, vets and such would more than likely be able to get a 100% commercial mortgage for their business. This is because these are generally classed as professional businesses while others are generally seen as non professional.
A 100% mortgage will use the property that you are intending to purchase instead of asking you to pay a deposit. However when going for a 100% commercial mortgage there may be other fees included which you will have to pay out for and these include valuation fees and legal fees, however in the majority of cases these fees can be added onto the mortgage providing of course there is enough security in the property you are intending to purchase.
However in the majority of cases the lender will offer a mortgage of between 70% and 80% of the total value of the property which you are intending to purchase. This means that you will have to find the rest of the money yourself, of course this could leave you with a substantial amount of money to find towards the property and this should be taken into account when going for the mortgage.
Ways that you can get this money include asking for a business overdraft, releasing equity, using 50% of the total value of your pension fund towards the cost or handing over a share of the business in return for financing.
Depending on your knowledge of financial matters it could be in your best interests to talk with a financial advisor before committing your self to a commercial loan.
Searching online for information and providers which offer commercial loans is the best way to go when looking for a loan of this type. Not only can you get the right information but you can also fill in an online form which will give you a quote for the loan. This way you are able to compare and shop around for the best deal possible on your commercial loan.
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1 comments:
Interesting post. I want to run a business soon, so I'll keep this post in mind. Becoming, what I hope, an entrepreneur is somewhat new to me, so I can use all the help and advice I can get! I know it'll be tough. Lately I've been thinking about the idea of buying a business instead of starting from scratch. I'm not sure what I should go for. Franchise? Home-based? I don't know. Do you have any suggestions or advice? Thanks!
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