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Commercial Mortgages - The Facts
By David Grooms..
Commercial mortgages
are very similar to residential mortgages. Instead
of an individual buying the property a business is.
Unlike residential mortgages - commercial and semi
commercial lending falls into a very strict lending
criteria. Commercial lenders are not your normal high
street building societies.
Most people will look to their high street bank for
commercial mortgages. The high street banks often
have very strict lending criteria and often turn down
loans. What most people do not realise is that there are
hundreds of commercial brokers and commercial lenders who
understand business funding and have much more relaxed
criteria.
Normally the maximum amount a lender will give is 85% of
the purchase price. This can be increased to 100% or more
with additional security.
You can have the mortgage for any period between 1
to 30 years and the type of mortgage can be a
repayment or interest only.
Like residential mortgages there are always special deals
available and you can choose between a variable or fixed
interest rates.
The process to obtain the loan is also very similar to
residential mortgages. You will first receive a
written decision in principle for the loan. This is a note
from the lender detailing the rates he would be prepared
to offer you based on the information he has received.
Once you are happy with the
'Decision in Principle' then you will need to complete a
formal application. This will go into a lot of detail
about the business and the property.
The property will need to be valued before the lender can
make an official offer. Any issues from the valuation or
application can affect the rates given of the 'Decision in
Principle' form. In some cases the lender will decline the
deal.
Now the paper work needs to be sorted. This is the job of
your solicitor who will handle the whole transaction from
this point to completion. In just a few weeks you will be
handed the keys to your new business or property.
Article Source:
http://www.articlemap.com
Sovereign Commercial Finance are a specialised
commercial mortgage broker ,providing mortgages for
all types of businesses.
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