Are you looking for capital to help you purchase, remortgage, or invest in commercial property? A commercial mortgage could be the solution.
Commercial mortgages, are specifically designed for individuals or businesses looking to purchase a property as a business/investment asset.
There are two types of commercial mortgage – an owner-occupier mortgage for trading premises and a commercial investment mortgage for those looking to invest in commercial property.
An owner-occupier commercial mortgage is suitable for individuals or businesses who purchase property with the intention of trading from it whilst securing an asset/investment at the same time.
Commercial investment mortgages are designed for individuals or businesses looking to purchase a property to generate income by renting out the property.
Commercial mortgages can be structured in many different ways including onshore, offshore, company name, LLP, trust or personal name.
Commercial mortgages can be used for a range of reasons but at Coreco Commercial we specialise in commercial mortgages for real estate investment purchases such as:
With our knowledge of the lenders within the commercial mortgage sector our team will find the best lender suited to your needs and support you in every step of the journey, from application to completion.
Before taking out a commercial mortgage there are several things you need to consider including affordability, deposit levels, the impact on your business and the outcome of getting a commercial mortgage.
Lenders will judge whether the mortgage you’re applying for and the repayment terms associated with them are something you can afford to pay back, just like a regular residential mortgage. Unlike a residential mortgage, it won’t be your personal income they look at but rather your business earnings before interest, tax liabilities, asset depreciation and amortisation.
Commercial mortgage deposits are different from residential mortgage deposits. Where residential mortgages can be found with higher loan to value ratios, these can be much harder to come by in the commercial market. Deposit levels for commercial mortgages are often governed by:
With the mortgage markets changing on a near daily basis get in contact with an advisor who will be able to give you the latest, up-to-date information that’s relevant to your situation. You can request a call back at a time convenient to you or send us a message and one of our team will be in contact, usually within a few hours*!
*during our working hours, Mon-Fri, 9:00-17:00
Throughout the process your advisor will be on hand to answer any questions you have, support you with your paperwork and keep you informed.
In general mortgage lenders require the following information however when it’s time to apply your advisor will be able to let you know what your chosen lender needs.
When it comes to commercial mortgage eligibility there is a slight difference between investment commercial mortgages and owner-occupied commercial mortgages. The difference lies in how you plan to pay back your mortgage, for an investment commercial mortgage this would be through the rental income of the property. With an owner-occupied mortgage, you’ll pay back the mortgage with the income/profit derived from the business.
For both types of commercial mortgage lenders are happy to accept a wide range of business structures including:
Other factors that can impact the eligibility for a commercial mortgage include:
There is a range of alternatives to commercial mortgages, depending on the value you want to borrow and how quickly you need to progress.
A bridging loan allows you to move forward with your purchase of the property quickly and then switch to a commercial mortgage once the sale is complete.
Some of the more lucrative commercial investments include shopping centres, industrial estates, agricultural land and office buildings.
From a lenders point of view, there are two key factors to consider:
Commercial mortgage rates are dependent on experience, track record, industry sector and the strength and performance of your business, or the business, you are considering.
Competitive commercial mortgage rates are available for business owners, but be prepared. You might be able to achieve better rates if you move your business banking to the same provider that you borrow from. On the other hand, commercial mortgages from specialist lenders tend to be priced a little higher, but they may not want your business banking.
Commercial mortgages are typically set at an interest rate above the Bank of England’s. Generally, loans are available for up to 75% Loan to Value (LTV), so expect to provide a minimum of 25% of the property value, and funding is available from £500,000 to upwards of £100 million depending on the project.
Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured upon it.
There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.
A percentage of the mortgage amount may be charged depending on individual circumstances. A typical fee is 1%.
Coreco Commercial is a trading style of Coreco Specialist Finance. Coreco Specialist Finance. Registered Office: 117-119 Houndsditch, London EC3A 7BT. Registered in England Number: 06851546
Coreco Specialist Finance Limited is authorised and regulated by the Financial Conduct Authority.
Some types of finance offered by Coreco Commercial are not regulated. Please contact us for more details.
Coreco Commercial advisers are experienced mortgage advisers but we are not tax advisers. Please seek independent tax advice if required before you decide to proceed.
We know that all our clients are unique, and therefore the finance you require needs a different approach. We pride ourselves on providing a client focussed journey built around your needs and goals.
Our team always expresses their professionalism through their authenticity, high level of work ethic, and can-do attitude. We always find the best way for our clients to succeed.
Our progressive and forward-thinking outlook allows us to guarantee an exceptional level of innovative advice and service, ensuring an effortless, client-centric journey in the ever-changing financial world.
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