There are many lenders that offer commercial mortgages, but how do you find the best deals?
Commercial mortgages can be complex, and there are many matters to consider when choosing the best deal.
No fixed interest rates
When you are looking for a standard residential mortgage, you can check the price comparison sites who list the conditions and interest rates for mortgage providers. It is difficult to do the same for commercial mortgages, as lenders do not have fixed interest rates. Each loan application is assessed for risk and the interest charged reflect the perceived level of risk. Large low-risk loans will generally have the lowest interest rates.
Commercial mortgages will generally be more expensive than residential mortgages for individuals, but are still at historically low levels.
Going directly to a lender
You can approach a lender directly, but this way you will not be certain of getting the best deal. You may have to contact many lenders to find out about all the available deals. This can be a lengthy process and at the end, you cannot be certain to have found the best deal. Some lenders reserve their best deals for mortgage brokers.
Even if you find a good deal, there is no guarantee that your commercial mortgage application will be approved.
When choosing a commercial mortgage product, the decision should not be solely influenced by the level of interest. Other points to consider include whether to go for a fixed rate mortgage or a variable rate one.
Interest only commercial mortgages are another option. These offer lower repayments and are often used for property development or property that you intend to sell for a profit after a short time.
Using a mortgage broker
A good commercial mortgage broker has access to a wide number of lenders. Ascot Mortgages will discuss your finance requirements and can make an initial assessment of whether you will be successful in getting a mortgage. We can then approach one or more lenders and, if necessary, negotiate on your behalf to get the best interest rates.
It could be that your loan application will be refused by one lender but approved by another. For example, if your business has a poor credit record, this may result in a loan refusal. A specialist lender may be prepared to provide a mortgage if you have poor credit history. We can match your individual situation to a lender that is likely to approve your loan application.
A broker will inform you of all the mortgage options including fixed rate, variable and interest-only mortgages. After all, you need as much information as possible to make an informed choice about the type of mortgage that is best for your individual property purchase.
To support your commercial mortgage application, you will need to provide documents such as business accounts and a business plan. Ascot can help you with the preparation of these documents.
To find the best commercial mortgage deal, first discuss your borrowing requirements with us