A commercial mortgage is a method of financing a building or property with the view of using that building or property for the purpose of the business. The property bought and mortgaged for business use would be used as collateral against the mortgage; this means that the lender will continue to have a legal right over the property until the full amount of the mortgage has been repaid. In the worst case scenarios, if the business is unable to repay the loan, the property can be repossessed by the mortgage company.
Commercial mortgages can be take out for many reasons such as purchasing a new business premises, purchasing new and to develop for the business, new factory, new offices or a warehouse and even in order to expand and modernise an existing building used by the business.
Interest rates vary on commercial mortgages but it is well known that they are generally higher compared to residential mortgages. Most best commercial mortgages will have either a fixed interest rate which means the interest rate will remain the same throughout the life of the mortgage or an interest rate which is linked to the bank base rate. And as mentioned above, the commercial building will be used as collateral for the mortgage in case of payment defaulting. For best commercial mortgages the amount of the interest rate is calculated from many different factors such as the business’ credit rating, reliability and financial figures.
Finding the best commercial mortgages can be a highly lengthy and stressful procedure, there are so many potential lenders in a very competitive market, and therefore it is very difficult to scour them all in order to find the best deal. Ideally you will need to find a commercial mortgage lender who will offer a lower interest rate than others, this is not the only requirement however, and all aspects of the package must suit your business’ needs and situation perfectly. Many business owners delegate this responsibility to an experienced commercial mortgage broker; they are often highly qualified to find the best deals on the market after listing and taking note of your business’ needs and situation. They are also very well placed to find great commercial mortgage deals which are often snapped up very quickly. If you are doing it yourself however, it is essential to carry out extensive research. Getting the decision right and finding the best commercial mortgage is essential in order to allow the business to move, modernise and expand into bigger and better things.