This can include a freehold office, factory, retail store, hotel, and so on. Many businesses can take advantage of a commercial mortgage to purchase a property. The loan-to-value (LTV) ratio is utilised to measure the amount you are borrowing (the loan) in comparison to the property’s worth (the value). Loans normally start at £50,000 and from 5-30 years to pay back.Ī 70% to 75% loan-to-value ratio is usually gained from an owner occupier commercial mortgage. This includes the price of the premises, your initial deposit, and the length of the mortgage. Have you already benefited from a traditional business loan? If so, a commercial mortgage is usually the next step up the lending chain.Īs for the terms of this commercial mortgage, various factors have to be considered. At Drake Mortgages, our expert advice can ensure you know exactly what you are paying when applying for a commercial mortgage. Due to all of the expenses involved – and the confusion it naturally brings – it makes sense to work with a broker for clarification. Additional costs with this mortgage type include general legal fees, a standard valuation, and arrangement costs.
It is not just interest rates that you have to be worried about, either. With that said, commercial mortgages usually come attached with a higher rate of interest – even if it is just a small general increase. Repayment options for a commercial mortgage also do not differ too much from those discovered in the residential market.
If you qualify for a commercial mortgage, it allows you to buy your own business premises. Well, an owner occupier commercial mortgage is not much different in theory. You will be familiar with residential mortgages for your home. What is an owner occupier commercial mortgage? So how can you finance such an important business purchase? Fortunately, there is one specific solution available – an owner occupier commercial mortgage. When you own a property those types of worries are no longer a concern. No need to worry about leases, rent reviews, dilapidations and service charges.
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