Commercial
Mortgages
A
commercial mortgage is probably the
best way to finance a purchase of premises
for your business. It provides the most
flexible and affordable financing solution.
A commercial mortgage is a specialised
commercial loan. Just like normal mortgage
on a house, the lender has a legal claim
over the property until the loan has
fully been paid off.
This
page will give you an overview, but
it does not replace professional advice.
We suggest you to consult your accountant/tax
advisor to make the most in tax benefits
and avoid complications.
A
commercial mortgage can be arranged
for:
How
It Works
Mortgages
may be structured several different
ways but the two most important points
are the interest rate (type) and the
repayment period.
Normally
there are two interest rate options:
Fixed
Rate: With a fixed rate the
interest rate, as it says, will remain
constant through out an agreed period
that may or may be shorter that the
length of your mortgage. The interest
rate is set at the beginning of your
mortgage by examining the risk involved
and the current market rates. The advantage
of a fixed rate loan is that your interest
rate is fixed and will not rise if the
market rate rises. The disadvantage
is that you will not benefit from any
reduction of the market rate.
Variable
Interest Rate: With a variable
interest rate the interest will fluctuate
in line with changes to the Bank Base
Rate. As a result your payments will
also fluctuate.
Generally,
you can initially get a lower interest
rate on variable interest rate than
on a fixed rate mortgage. The advantage
of an adjustable interest rate mortgage
is that you save money when the market
rate decreases. The disadvantage is
that you are not protected from an increase
in the market rate and the interest
rate you pay will increase with the
market rate.
Always
remember the longer you take to payback
the principal the higher your total
interest payment will be.
Interest-Only
Payments and a Final lump sum
Payment: With this type of mortgage,
your regular payments cover only interest.
The principal stays the same. At the
end of the mortgage term, you must make
a lump sum payment to repay the principal.
The obvious advantage of this arrangement
is the low periodic payments. But over
the long term, you will pay more interest
because you are not reducing the principal
sum on which you pay interest
Endowment
Mortgage: This type of mortgage
is similar to an interest-only mortgage
but the repayment of the principal comes
from the proceeds of an endowment. Several
types of endowments are eligible for
this type of mortgage, they include:
life assurance policy, personal or executive
pension plan policy, or a personal equity
plan. The additional security provided
by the endowment usually result in a
lower interest rate.
We
can arrange commercial mortgages from
£100,000 to any limit.
Why
not discuss you requirement with one
of our advisors will help you to decide
if what is the right for you and your
business.
Call
now at: 08451 30 40 92/3 to book an
appoinment.
Or
just complete a short enquiry form now.
