Commercial mortgages differ from residential mortgages because they are used as a method to secure the payment on a property which will be used for business purposes. A commercial mortgage can be taken out by most business structures, including sole traders, partnerships, limited and public companies. Obtaining a commercial mortgage can be used for purchasing a new building for the business, a piece of land which will be used by the business or the redevelopment and expansion of a building which will be used for the purposes of the business. Many high street banks and mortgage companies offer commercial mortgages and it can be a very competitive market like the residential one. Like residential mortgages, the banks or mortgage company will have a legal right to the property or the land until the full amount of the mortgage has been repaid.
The interest rates on commercial loans are usually a little higher, this because businesses are perceived to be higher risk. There are also more terms and conditions regarding the acceptance of a commercial mortgage application. Obtaining and choosing the right mortgage for a business is an essential aspect regarding allowing a business to move forward, grow and expand. It is a big decision for an individual to undertake, especially if they have no prior experience or if they have a busy lifestyle, choosing the correct financial mortgage requires a lot of research and dedication. For these reasons many business owners delegate this task to a commercial mortgage broker. A qualified commercial mortgage broker will usually have extensive expertise in the mortgage market and will attempt to find the perfect mortgage deal to suit the business’ needs and situation.
A commercial mortgage broker’s first job would be to discover the business’s financial situation and what they require out of their mortgage. The broker will then scour the market to find the best commercial mortgage for the business, mortgage brokers are very well connected so they will often find deals which have just hit the market. Once the commercial mortgage broker has found a suitable deal and has talked it over with the business owner, a decision is made whether to pursue the deal or not, all of the application forms and paper work is usually done by the mortgage broker. A commercial mortgage broker will handle most aspects of the process and takes away an enormous amount of stress and complexity from the business so they can get on with trading and doing what they do best.