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4 Questions you may have about professional commercial mortgages

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Professional commercial mortgages vary depending on sector, premises and business, and at FC Funding, we believe that every client has different requirements when it comes to their mortgage. If you’re considering a professional commercial mortgage, then check out our guide to some frequently asked questions.

Why would I take out a commercial mortgage?

Owning your business premises is a long-term investment which can protect you against increasing property rent. It can also allow you to consolidate business debts, and some business owners use a commercial mortgage to purchase a property either for their own business or to rent out, unlocking the equity within already owned buildings.

How much deposit will I pay on a commercial mortgage?

You can pay anything from 20% to 40% deposit when it comes to applying for a commercial mortgage. These figures vary depending on the type of commercial property you’re buying and the amount the lender thinks you can afford. Most lenders will use the property you’re buying as security for the mortgage, though in some cases you can use other properties you own to secure the new purchase.

What will the mortgage and repayments be?

Mortgage loan terms differ depending on the situation. You can take out a professional commercial mortgage from 5 to 40 years, and interest rates vary too. The bigger the deposit you take out, the lower the Loan To Value (LTV) rate will be. Fixed rates can be set for a certain period too, providing you with guaranteed repayment plans.

Are there any other costs to consider?

Interest repayments on a professional commercial mortgage are tax-deductible. On top of this, it’s worth considering renovation of your property to get it into the state needed for your business, and then there are the legal fees and administration charges that you need to pay when taking out a mortgage. It’s best to set aside some money for all of these extra costs when you’re considering a professional commercial mortgage.

If you would like some further information on commercial mortgages or would like a free quotation for your requirements, please call us on 01202 937880.

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