In This Article
What is a commercial mortgage?
A commercial mortgage is a type of loan that helps businesses finance the purchase of commercial property or to raise money against one that is already owned. Like with a residential mortgage, the lender will want to assess you to ensure you have the means to repay the loan.
However, the mortgage is taken out in the name of the business or in the name of the investor and the loan borrowed may be assessed on the income of the individual or the business.
In many cases, individuals purchasing a commercial property will use a commercial mortgage either as they may not have all the funds needed to complete the transaction without one or as they wish to retain there funds for investment in the future. Also for example, they may want to hold back funds to assist cashflow or future investment may be needed in the building.
Commercial property transactions incur stamp duty costs, for more information about this, see information on Stamp Duty.
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What are Commercial Mortgages Bournemouth used for?
Commercial mortgages Bournemouth are used to finance the purchase of commercial properties, businesses, and land or they may be taken to raise finance against properties that are already in possession that are in Bournemouth. They can be a good option for those who cannot afford to pay for these things in cash. Commercial loans may be used for the following:
- Blocks of flats
- Buy-to-let properties
- Commercial investment properties
- Development finance
- Holiday lets
- Industrial investment properties (including light industrial)
- Nursing/care homes
- Professional practices
- Public houses
- Residential investment properties
- Semi-commercial properties (residential properties that are above or adjacent to commercial premises)
Where can I get a commercial Mortgage?
If you want a Commercial mortgages Bournemouth, you should speak with a mortgage broker. The best type of commercial mortgages can be found by using the advice and services of mortgage brokers as they have a wider range of lenders to choose from so more choice than just visiting your bank.
Mortgage brokers work independently for you as the borrower so will be looking for the most suitable solution for your situation. A great mortgage broker will use their industry expertise to assess your situation, requesting any documentation required from you to work out options.
Most commercial mortgage advisers are likely to be members of the National Association of Commercial Finance Brokers.
Is it easy to get a commercial mortgage?
It is not always easy to get a commercial mortgage because lenders look at different factors when approving loans for a borrower. Some of these factors include the loan to value ratio, credit score of the borrower, and ability to repay the loan in the future.
Additionally, the type of property being purchased and the sector it is in can also affect the lender’s decision.
Are Commercial mortgages in Bournemouth expensive?
Many people think that commercial mortgages are expensive, when in reality, they can be quite affordable depending on the individual’s circumstance and may work out cheaper than renting the commercial premises whilst repaying the loan against it over time.
A commercial mortgage adviser will be able to find terms that suit your individual situation and give you individual advice.
How much deposit do I need for a commercial mortgage?
The amount of deposit you need for a commercial mortgage will vary depending on the type of property you are buying and borrowing against. However, for most commercial properties, you can borrow up to 70% of the value of the property.
This may be higher for some situations and your commercial mortgage adviser will be able to confirm this once they have a full understanding of the situation and know what lenders you could approach.
Who can get a commercial mortgage?
Any business, including partnerships and limited companies, can apply for commercial mortgage. Individual purchasers of commercial properties can also apply to purchase or refinance a commercial property using a commercial mortgage.
Can a first time buyer buy a commercial property?
No, most lenders will not lend to a first time buyer to buy a commercial property. This is because these buyers generally lack the experience in letting property, especially when there is a commercial element involved or occupying their own commercial property and paying the mortgage.
However, there may be some first time buyers that have a successful business and now wish to purchase premises. If this is the case, complete the contact form to speak with a commercial mortgage adviser that will be able to give you tailored advice to your situation.
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What is a semi commercial mortgage?
A semi commercial mortgage is a loan that can be used to purchase a property that has both commercial and residential parts. This type of mortgage is different than a fully commercial mortgage, because the mortgage can be used partially for a commercial property purchase, or for a property with a very small commercial element.
In some cases, a standard buy to let mortgage may qualify for the property, depending on what the property is used for and the exact make-up of the property. This is also the case for many blocks of flats, depending on how many flats are in the building.
Can I use commercial mortgages for development or short term transactions?
You can use commercial mortgages for development or short term transactions by using development finance for building projects such as construction of housing estates or converting a building into flats with a view to selling them. These loans often roll up and are based on the future value of the development.
Bridging finance is also possible to get a short term loan to fund a commercial property purchase. This type of finance would be paid using a suitable exit strategy such as sale or a commercial remortgage. Find out more about a Commercial Bridge Loan.
Why have a commercial property in Bournemouth?
Bournemouth is a great place to have a commercial property for a number of reasons. First, the town has a strong economy and a large population of potential customers.
Additionally, Bournemouth is well-connected to other parts of the UK and has a variety of businesses and amenities nearby. Finally, the town is known for its mild climate and beautiful coastline, making it an attractive place to do business. Other points are detailed below:
- Highly affluent population with a strong economy
- Also known as the ‘Job Capital Of The South’ as its highly popular job market is propelled by a large sector of service industries
- Biggest private sector job market in the UK
- Almost half of all businesses are in the retail, food and drink or service industry
- Strongly pro-business, welcoming and entrepreneurial culture
- Also known as the UK seaside resort capital with some of the best beaches in the country and very popular in coastal trade
- Very strong reputation for cultural tourism and is a very popular destination.
- Some of the biggest towns are Poole and Christchurch near Bournemouth
I’m looking to buy a commercial property in Bournemouth. Does my mortgage broker need to be based here too?
You don’t need a local mortgage broker for Commercial Mortgages Bournemouth. Many mortgage brokers work remotely and can help you no matter where you are. Choosing a broker based on their experience and skills is more important than their proximity to you.
If you feel like you need a face-to-face meeting to make sure you understand the process, then you should look for a broker that’s close by. If you don’t feel like you need that and want to talk to a professional mortgage broker, I NEED ADVICE can put you in touch with one. Please complete the contact box and we will arrange this.
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Bournemouth makes a great location for a commercial property for many reasons. It has a strong economy due to the large population of potential customers. The town is also well-connected to other parts of the UK, has a variety of businesses and amenities nearby, and is known for its mild climate and beautiful coastline.
If you’re looking to purchase or finance an existing property for commercial purposes, it’s generally best to speak to a mortgage adviser for independent advice. This is because commercial mortgages Bournemouth can be more complex than residential ones.
Some questions you should ask yourself before speaking to an adviser are:
- Have you been let down by an existing lender or broker?
- Are you unhappy or have lost faith in the current lender relationship you have?
- Is the finance deal complex?
- Do you wish to obtain the best rates and terms for your commercial property?
If you answered yes to any of the above questions, please get in touch with us at I NEED ADVICE. We’ll match you with an adviser that has access to major banks and Specialist Lenders within the UK to give you the advice that you need.