A good commercial mortgage broker is expert at finding the best loan deals to purchase commercial property. At one time businesses went to large banks for mortgages, but now there aremany specialist lenders who work with commercial mortgage brokers to deliver the best finance packages.
There are at least five advantages of using a commercial mortgage broker.
1. Non-traditional security
Most lenders require property as security for a commercial mortgage loan. If the business is buying commercial property, the value of the property is used as security. Some alternative lenders will consider other forms of security, These can include equity in the business or other assets such as high-value jewellery and antiques.
It is not normal to receive a loan for the whole value of the property. Lenders are more likely to lend 75%, with the business paying the other 25%. If the business owns other property other than the one they are purchasing, this can be used as additional security so that lenders will lend more than 75%.
A mortgage broker can negotiate with the lender to accept alternative or additional security.
2. Borrowing that the big banks will not fund
Large banks tend to have fixed lending criteria for the types of property deals they will finance. Not all deals are straightforward, and banks may turn down loan applications for what they consider more complex deals. A mortgage broker can find a specialist lender that is prepared to provide a loan for complex situations.
3. Not just interest rates
The main concern of many borrowers is the interest cost of the mortgage. Finding a low rate is important, but there are other factors that a mortgage broker will ask you to consider. For example, you may find that a condition of a buy-to-let mortgage is that it cannot be let to students, or cannot be let on a short-term basis using agents such as Airbnb. If the house is in a student area or you think that you may want to let it for short periods between tenancies, the mortgage conditions could be an obstacle. A mortgage broker will discuss all the possible tenancy types that you may need for a property and make sure that the terms and conditions of the mortgage do not restrict you.
4. Long-term relationships
Ideally, a mortgage broker will have a long relationship with you. If you are considering investing in more properties, they want to be your first source of funding. To encourage repeat business, the broker should provide excellent service.
5. Bespoke service
A large bank will look at your mortgage application and only offer a loan if your case ticks a number of boxes on their forms. A broker offers a more bespoke service, looking at each loan application on an individual basis so that they can match your loan requirements with the most suitable lender.
To discuss your mortgage requirements, talk to an expert at Ascot Mortgages who can find the best commercial mortgage for you.