If you’re in the market for a commercial property, then you’ll need a mortgage, the same as you would for any residential property. How you get that mortgage, however, is up to you. You might go to your existing bank to put in a mortgage application, or if you want to see offers from multiple options, you’ll need a broker.
Specifically, you’ll need a commercial mortgage broker.
What is a Commercial Mortgage Broker?
Commercial brokers can help you connect the dots between your business venture and the lenders who can help you make your goals a reality. FCA-certified mortgage brokers help speed things up significantly while remaining impartial. With an FCA-certified broker by your side, you’ll be able to see more mortgage offers more quickly (so long as your application is solid).
Without one, you’ll have to manually make inquiries and applications to lenders yourself. This can take a lot of time, and you may end up not finding a great deal. It’s certainly possible to find the best possible rates by hunting down offers yourself, but if you want to move fast and see multiple offers from lenders ASAP, a broker may be the way forward.
What Does a Commercial Mortgage Broker Do?
A commercial broker takes care of a few key elements of the commercial buying process for you.
To start, if you are new to the process, they can let you know the steps involved with getting a mortgage so you’re fully aware of things like the timeline, what you’d need to put together for a strong application, and so on. They can even inform you about the types of mortgages, what they do, and how to repay them.
If you haven’t purchased a property before, that insight into mortgages can give you the knowledge you need to make better decisions for your company since you are more aware of your options.
Mortgage brokers also work to connect you with lenders. An independent broker like Your Certified Expert has no ties to any particular lender, either. This means there’s no emphasis on one lender over another. Instead, you get a list of the mortgage offers that are available to you.
If you have a lot of offers (this happens if you have a strong business going and good financials), then your mortgage broker can even help you understand the difference between the mortgage offers.
The goal is to connect you to the right mortgage for you.
How do Commercial Mortgages Differ From Traditional Ones?
Commercial mortgages are needed to buy commercial properties. These include stores, warehouses, and even manufacturing plants. If a business operates out of it, then a commercial mortgage is needed to buy it.
Commercial mortgages tend to cost more than residential mortgages. They may also come with shorter repayment periods. Instead of 30 years, for example, the repayment period may be less, from 3 to 25. The exact number of years, however, depends on the agreement.
Regardless of how long a period you need or want to pay back the full amount of the loan, your broker can help you. If you have a specific period of time in mind or need as long as possible, let your mortgage broker know. They will help connect you with options that suit your needs.
Commercial Mortgages Broken Down: Finding the Right Option for You
Think of a commercial mortgage as an umbrella term. There are many different types of mortgages that will fall underneath the commercial mortgage family, so it’s important that you know which type you need.
If you aren’t sure what each option means, you can ask your mortgage advisor, who can explain the types of mortgages available. This way, you can better start looking for mortgages that directly relate to your situation.
Your mortgage broker can go into detail. For now, here’s a quick overview of the types of mortgages your commercial mortgage broker can help with:
- Owner-occupier mortgage: This is the type of mortgage you’d need if you wanted to buy a commercial property for your own business to operate out of.
- Commercial investment mortgage: You’d need this type of mortgage if you wanted to buy a commercial property to rent out to other businesses.
- Commercial bridging loans: If you need the funds from a commercial mortgage sooner or plan on selling other assets to cover the cost of your next purchase but haven’t sold those assets yet, then you might want a bridging loan.
- Development finance: If you want to develop a new commercial property to rent out (to residential or commercial tenants), then you may need a development finance mortgage.
Your mortgage broker can help you understand what each type of mortgage is used for and the exact terms and conditions applied to the offers you receive. This way, you can make the best decision for your business.
