• Why Using A Commercial Mortgage Broker Is A Good Idea

    Applying for a commercial mortgage is fundamentally the same as applying for a residential one, some of the questions may be a little different, but the answers need to be broadly the same.

    It will come down to questions about the security you are offering for the loan, your credit rating and how long you want to borrow the money for. Sure if you already know which lenders prefer your type of business, and you know what their lending ratios are you will probably have little trouble arranging your own commercial mortgage. Most other people will get a better deal if they use a commercial mortgage broker, and here`s why.

    Why Using A Commercial Mortgage Broker Is Better

    The commercial mortgage market is relatively small compared to the residential market, however it is much more complex. Lenders want to know that their money is safe, and they also want to understand your business. When a doctor or accountant applies for a personal loan the lender immediately knows quite a lot about that person`s income. Commercial lenders want the same depth of knowledge about a potential borrowers business.

    This means that when applying for a commercial mortgage a lender will want details about your business credit rating, your balance sheet, the purpose of the loan, along with the location and value of the proposed property.

    Applying for a commercial mortgage takes a lot of effort, there are form to fill in, accounts to collate and a 101 other considerations. You want to ensure that you have the best prospects of getting the right deal first time.

    Here are a few things to consider:
    1. Different lenders have different criteria for approving a commercial loan application.
    2. A broker can represent you and submit your commercial mortgage application to the right lenders lenders. Maximising your chances of success.
    3. A commercial broker doesn’t usually earn a fee until a loan is approved, which should mean they are prepared to work pretty hard for you.
    4. Many brokers get paid by the commercial lender and not you.

    It`s easy to get into a mind set of thinking that the first lender to say yes is the deal to go for. Commercial lenders are hungry for the right business so you may be able to negotiate a better deal by playing one off against the other. More importantly it is vital to fully understand the mortgage you are signing. Getting the wrong terms can prove very costly further down the line.

    When you do things the right way they just seem to work. Using a commercial mortgage broker can make sure that you get the best result for the minimum work. A that not only gets you the commercial mortgage you need, but also the most appropriate one for your circumstances.

  • Fast Commercial Mortgages

    A fast commercial mortgage is easy to get but be prepared to pay a little extra.

    Competition among financial organisations and banks is the main factor that in recent times has led to commercial mortgages becoming much easier to obtain. Difficulties traditionally associated with a poor credit history once meant that an application for a commercial mortgage might well have been rejected.

    Nowadays however bad credit history is simply perceived by the lender as carrying a higher risk and that higher risk can be offset by an appropriate increase in the level of the commercial mortgage interest rate. The choice of a lender is very important since there can be quite wide variations in terms and conditions and rates of interest. Your credit history and the period of repayment are factors that immediately affect the terms and rates of a commercial mortgage.

    As a general rule it is probably preferable to deal with one of the ‘High Street’ banks even at the expense of a slightly higher interest rate.  Failing this, the finance companies will almost certainly provide you with the funding you need but it is advisable to ‘do your homework’ on the lender of your choice.  Competition is fierce and they usually advertise their ‘best’ deals. This does not necessarily mean these deals apply to you.

    Commercial mortgage rates vary according to your personal circumstances and requirements whereas the ‘headline rate’ that is advertised is the very best they will do and is reserved for those with clean credit and straightforward requirements. It is therefore essential to establish exactly the terms applicable to you.

    Any contract that sets out the terms of lending must be carefully read and if there is any doubt about its meaning or implications it should be taken to a lawyer or at least a reputable commercial mortgage broker. Remember that you will be bound by the contract that  you sign.

    There are many facilities available that will give you information about lenders, their reputation, their products and generally whether they are a fair and reliable company to support you for the duration of your loan  –  and beyond if you should choose. Make use of the Internet, newspapers,the trade magazines as well as word of mouth reports and questioning the company personally on any points you are unsure about.

    In summary, do your research carefully and pay close attention to the terms offered. And remember that a bad credit history will not prohibit your application but you should be prepared to pay a slightly higher commercial mortgage rate.

  • Commercial Mortgages, are brokers necessary?

    There are an estimated 5.2 million commercial properties with in the UK with the total size of the retail, office and industrial stock presently estimated to be over £610 billion. It may surprise you to find out that 52% of these commercial properties are investment stock. The remainder are obviously owned by owner-occupiers, mostly using a commercial mortgage to pay for them.

    It should come as no surprise then that there has been a substantial rise in the number of investors looking to buy commercial properties, despite the confusion caused by the government’s change of heart over the use of commercial property in pension schemes.

    With this increased interest in commercial property by investors and business owners alike the role of the commercial mortgage broker has become a more integral part of the process. Since the Financial Services Authority (FSA) took over regulation of residential mortgages in November 2005 over 60% of mortgage brokers claim profits are down.

    Commercial mortgage lending is no longer the preserve of the high street banks. In the past the mainstream lenders seemed to cherry pick customers and would show a preference towards existing customers.

    Well that has now changed. In a competitive market the advantage passes back to the well informed customer. Because three years audited accounts are no longer a requirement and adverse credit clients are now considered, the choice of commercial mortgage products requires an in depth knowledge of the commercial mortgage market-place.

    Do your homework, and make sure that if you are using a commercial mortgage broker he has done his too!

    [tags]commercial mortgage broker, commercial mortgage[/tags]