Commercial remortgages and/ or refinance funding is used by individuals looking for a business mortgage to purchase a property in order to open a business or those individuals who are commercial property investors looking to finance either a remortgage or property purchase.
In most situations, lenders will take a close look at the details of the project and the interest rates associated with this type of financing will be determined on a case by case basis, taking into account the borrower’s past credit and experience as well as the soundness of his or her current business plan, as well as numerous other factors.
More About Commercial Refinance
In recent years, commercial mortgage rates and lenders have become tighter in their lending criteria for commercial properties. Because of this, it is important to find a knowledgeable mortgage broker who will be able to help you navigate the sometimes confusing waters of commercial finance to find the best possible deal for your unique project or situation.
Many brokers will work from a panel of lenders who are willing to work with that broker’s clients on a number of different financing projects. Brokers will also help their clients to compare deals from different lenders in order to find the right match.
When an existing organisation, business, corporation, or investor is looking to make a large, expensive purchase such as land, another business, a large amount of equipment, or a commercial property, a commercial business mortgage is an excellent financing solution.
In order to secure this type of financing, the borrower will have to secure the first charge over the property being used as collateral for the lender or lending institution to approve the terms of the loan.
Additionally, it is important to keep in mind that many lenders will only work with “brick and mortar” operations and not “good will” projects. It is also important to keep in mind that the pricing for commercial refinance or remortgage is much more complicated than that of the residential market.
In the commercial market, unlike the residential market, there is some ability to negotiate, which is where a mortgage broker can add the most value to the borrower’s transaction with the lender. The rate of a business mortgage will be based on a number of different factors, which will not include the current mortgage’s interest rates.
Some factors include the track record of the borrower and credit history, whether a self-cert or full-status mortgage is required, what additional security is available as well as projected performance of the business.
What Property Types May Qualify for Commercial Remortgage?
Not every property will qualify as a candidate for a commercial refinance or remortgage product. In order to make sure this type of financing is right for you, it is important to know whether or not the property being used will fall into the approval category.
Some of the property types that may qualify for a refinance or remortgage include restaurants, shops with residential flats above, buy to let properties, guest houses, HMOs, bedsits and studio flats, farm land and property, light industrial properties, professional practices including doctors, engineers or accounts, and commercial property development.
A mortgage broker can help to determine if your property will qualify.
Why a Mortgage Broker is Important
Aside from helping borrowers to negotiate with lenders and helping to determine property qualifications, brokers also play a huge role in finding the right loan for the client that meets all of their criteria.
Mortgage brokers can help to assist those borrowers who need self-certification mortgages, those who have no account records, those who are looking for refinancing for offices, shops, industrial units and guest houses or hotels as well as borrowers who are looking for interest only mortgages or loans.
It is important to seek the help of a knowledgeable professional in order to ensure you are getting the right financing product for your project as well as the best possible deal for your situation.