Understanding a UK Commercial Mortgage
In many ways a commercial mortgage is just like a residential
mortgage in that you pledge real property as collateral against a
loan to either buy or refinance that property. You can also
receive a commercial re-mortgage and use it as a line of credit
for any business purpose.
When you use a commercial mortgage to buy property, or to
raise funds for any other business purpose, the lender retains an
interest in that property until the loan has been paid in full.
Unlike other types of business loans, which usually have a
relatively short repayment period, you can take out a loan for as
long as 30 years if you like.
The lender receives repayment of the commercial mortgage
principal and interest over the lifetime of the loan. If you
default on the loan and go into arrears then the lender can
foreclose and take possession of the property that was used as
Generally speaking, the interest on a commercial mortgage is
tax deductible and the net proceeds of the loan are not
considered to be taxable income. However, you should always check
with your accountant to be sure because the tax consequences can
be severe should it be determined that your usage of the funds
was not for a qualified business purpose.
Should you be seeking a commercial mortgage for the purposes
of operating your business, rather than actually buying property,
then the lender will either want to re-finance your current
mortgage, and include enough money to provide the amount that you
are seeking, or they may arrange an equity line where they lend
you the difference between the current value of your commercial
property and the amount that you owe on the current mortgage.
There are generally two types of interest schemes available
when you are applying for a commercial mortgage.
The fixed rate commercial mortgage establishes an interest
rate that is in place either for the life of the loan or for a
fixed period of time. If it is for a fixed period of time then it
will normally convert over to the second type of rate, which is
called a variable interest rate, after the fixed time period
In some cases your lender may add a Early Redemption Charge
(ERC) clause to your commercial mortgage contract which states
that if you pay off the note prior to the end of the fixed rate
period then the lender is entitled to a one-time lump fee to
offset their loss of expected income. In some cases this ERC may
extend to longer periods possibly up to the entire term of the
loan. Be very sure to read your loan contract carefully to make
sure that you understand the implications of the ERC if it is
With competition from lenders heating up you'll find that many
of them are dropping ERC clauses all together. If there is one
present in your loan contract you may be able to negotiate it
away with little effort. It's worth trying in any case and you
can always apply somewhere else if your lender is not willing to
In the case of a variable interest rate commercial mortgage
the rate is based upon those issued by Bank of England. The
lender will usually state that the rate consists of the published
rate, which will likely vary up and down over the life of the
loan, plus some pre-determined premium that remains the same for
the life of the loan. Be sure that you understand how frequently
your rate will change and that you are comfortable with the
amount that the lender is charging as a premium. As with any
terms of your loan you can negotiate both of these factors.
A fixed rate commercial mortgage is a good choice when you
feel that interest rates are headed up sharply and you want to
lock in the current rates. On the other hand, if interest rates
are in flux, and economic indicators point to a downtrend, then a
variable rate may be your best choice.
Keep this strategy in mind during the lifetime of your
commercial mortgage. If you are locked into a fixed rate, and
interest rates have dropped significantly below what you are
paying, you should consider applying for a re-mortgage and
selecting a variable interest rate to take advantage of the lower
rates. On the other hand, if you are in a variable, and all
indicators are that interest rates will be skyrocketing soon,
then look to move into a fixed rate so you can protect yourself
against future increases.
Commercial Lifeline are Commercial Mortgage
and Bridging Finance specialists.
You can download our free Commercial Mortgage guides by
Commercial Mortgage Guide page.
This article comes with reprint rights. Feel free to reprint
and distribute as you like. All that we ask is that you do not
make any changes, that this resource text is include, and that
the links above are intact.
MORE RESOURCES updated Sun. May / 27 / 2018
This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news
Canton Citizen Newspaper
Smart About Money: Well-Earned Lucky BreakCanton Citizen NewspaperI also asked why she wanted the money she'd get from a mortgage refinance. It turns out she needed funds occasionally for the upkeep of her home. A mortgage refinance would give her more than she needed but the rates were the lowest. As it turned out, ...
Why you're never too young to own a homeThe StandardThe Kenya Mortgage Refinance Company will provide secure and long-term funding to mortgage lenders and thus make mortgages available and affordable to Kenyans seeking mortgage loans. This way, the company will support the quest for affordable ...
RELATED MORTGAGE AND REFINANCING ARTICLES:
Say Yes to ISA Mortgages
for a Convenient Mortgage Repayment
Customers who opt for an interest only mortgage, and feel
themselves fortunate at the extraordinarily low monthly
installments, wake up. The mortgage may be fast approaching
If you want a low interest, low payment mortgage refinance,
refinancing online could be the answer. There are many
mortgage companies who specialize in mortgage refinancing
When Not To Agree To A
Home Equity Loan
Before you borrow money on your home's equity, think twice
so you don't end up paying more than you expected. According
to the Federal Trade Commission, homeowners-particularly
elderly, minority and those with low incomes or poor credit
should be careful when borrowing money based on their home
The Top 5 Things You
Must Know Before Applying for a Mortgage
You've been thinking about buying your own home for quite a
long time, and now you're ready to take the plunge. You've
been saving money for a down payment, and you know the next
step is preparing to apply for a mortgage.
Mortgage Can Really Save You Money
Refinancing a mortgage is simply taking out a new mortgage.
It means paying off one or more old debts by getting a new
To Refinance or not to
Refinance -- Here is the Answer
I have written many articles on refinancing a fixed rate
mortgage to an adjustable rate mortgage. I have helped
people cut as much as $800 off their monthly payments by
turning their high fixed rate mortgage loan into a much
Have your home's appreciation grow twice as fast. For
Seniors over the age of 62 a Reverse Mortgage is a tool
that, while new to many, is increasingly being used to
maximize their retirement income.
What is a
A remortgage is changing your mortgage without moving your
home. Remortgaging is the process of switching your
mortgage to another lender that is offering a better deal
than your current lender thereby saving money.
Remortgage To Release
Equity By Improving Interest Rate
You have been paying on your mortgage for quite sometime
and you think that your money serves no purpose except
paying for your loan. This you already know.
Home Equity Loan
Information - How to Use One Wisely
Using a home equity loan to get out of debt or make
improvements to your home is usually a smart move. You have
earned the equity, so it only makes sense that you put it
to good use.
How To Tap In To Your
With today's relatively low interest rates and climbing
property values, many consumers are considering taping into
their home equity to finance everything from home
improvement projects to debt consolidation. Secured home
loans, also called home equity loans, are loans backed by
the borrower's equity in their property.
Doing a California
Californians are passionate people. I know.
A Simple Way to Save
Thousands on Your Mortgage Charges
How many times do you check you restaurant bill? If not
often, I would advise you to do it more, especially when
dining on your overseas vacations. Still, much more
Americans check their restaurants bill, than the number of
homebuyers, who check the charges for their mortgages.
How To Find A Mortgage
With Bad Credit
Shopping online for mortgages ought to be trouble free,
even should you have poor credit or no credit score. You
can nonetheless find a bad credit lender that can
Home Loans - Lenders
Continue to Offer High-Risk Loans
Home prices in the Untied States continue to soar, and the
remarkable run of real estate as the "must have" investment
continues. The median price of a new home, which only
recently crossed the $200,000 barrier, is now $215,000.
A Guide to Quick
The search for quick homeowner loans can seem futile at
first, especially if you don't know exactly what it is that
you're looking for. Different lenders may take longer or
shorter periods of time to make loan decisions, and the
time that they use may be time that you desperately need.
Getting a Home
Improvement Loan: What Your Bank Needs
The popularity of stores like Home Depot and Lowe's show
how many homeowners are jumping on the home improvement
bandwagon. Maybe you're thinking of redoing part of your
house as well.
Home Equity Loans in
A few notes of importance: This only applies to a homestead
property, that is the customers primary residence LTV
refers to Loan to Value, meaning the loan amount as
compared to the value of the home. As an example, a loan of
$75,000 on a home valued at $100,000 would be a loan at 75%
Mortgage Can Open Up A Lot Of Options For You And Your
It can happen to anyone, the roof is leaking, the credit
card bills are pilling up and it is almost time for a new
car. But where are you going to get the money to do all of
these things? The need for extra cash can be very
frustrating and worrisome, however if you are a home owner
you have a variety of financial options available to you
that you may not even be aware of.
Measurement 101 -- Evaluate Your Own Ability to
We live in a society where people are losing their homes at
an alarmingly high rate. There are several reasons for
this, but one could certainly be avoided -- buying a house
that creates a loan that is too large for you to handle.
used office furnishings-supplies-equipment-desks-cubicles-service-counters for
sale in Akron Ohio
Die cast model cars for sale in Akron Ohio
used cars for sale in Akron Ohio
unfurnished homes for
rent in Akron Ohio
ARM compare rates find the best rates current in your area lenders read reviews calculator adjustable rate loan home lenders brokers
quotes florida houston gmac washington interest only 2nd software debt consolidation
reverse senior equity texas maryland options lending bad credit
option one ameriquest chase first banks emc residential california miami dallas est branch marketing
home company commercial yahoo online bad credit low credit no credit