Property Linx - Commercial Property Mortgages

Q	Who uses Commercial Mortgages?
A	The obvious answer is commercial businesses. Commercial Mortgages are used for industrial units, offices, and shops. They are also used for Hotels, Guest Houses, Buy To Let and Farms. These days lots of people inspired by the myriad D.I.Y. television programmes have decided to try their hand at property development and find a short term commercial loan quicker to arrange than remortgaging their main residence to provide funding.

Q	Are Commercial Mortgages and loans expensive?
A	As interest rates are relatively low at present and Commercial Mortgages can be sourced for less than 3% above Barclay's base rate, with an additional 1% fee charge per month, but with no arrangement or redemption fees, making them comparatively favourable. Providing these types of funding are used as they were designed, for a short-term usage, they can provide great flexibility. Commercial Mortgages can be arranged more quickly than a residential mortgage and valuations are often based on the value of a business as a going concern, rather than a direct property only valuation. This means a small Guest House with a "bricks and mortar" value of �250,000.00 may be valued for commercial purposes at �350,000.00.

Q	What if I am not already in business?
A	A profit and loss projection may suffice. Audited accounts are not always necessary. As with any financial commitment you must understand that it is your responsibility to make the repayments. Commercial Mortgages can be used for any purpose i.e. debt consolidation, capital raising for expansion, investment in technology or machines, and even to allow the business to continue trading whilst experiencing cash flow problems.

Q	Are Commercial Mortgages all the same?
A	No. They vary from lender to lender. Whilst some Commercial Mortgages require full status proof of income, there are others at a slightly higher lending rate, which allow self-certification. There are also offset Commercial Mortgages, that maybe ideal for the developer and farmer, who may need to take a large sum of equity for a short term and then place the profit back into pay off the loan without penalty.