Buy-to-let & Commercial
Commercial Mortgages
What is a Commercial Mortgage?
A commercial mortgage is a loan from a bank, building society or other specialist lender that is arranged for the purpose of purchasing or refinancing property that is primarily used for commercial or business use. Examples include properties that house businesses or operate as investments, like an office building or block of flats. They can be seen as a complex form of lending; therefore using an expert with knowledge of the industry is recommended when arranging. Here at Jordan Lynch we have been arranging commercial mortgages since 2007 and have a great reputation with a wide panel of lenders.
What is the lending criteria?
Most commercial lenders prefer to lend to borrowers that have some form of prior property investment experience due to the complex nature of commercial property. Other things lenders are looking for include:
Minimum deposit of 25%
Residential Homeowners
Have owned at least one buy to let property for a minimum of 24 months
Have cash in the bank to cover any voids and future costs
Evidence that your businesses’ projected income or the expected rent can cover the cost of the loan
If you don't meet the criteria above there may still be an option for you. Get in touch with one of our experts today to discuss what may be available.
What are the costs involved?
Arrangement fees: Arrangement fees are typically added to the loan after the loan is approved but some lenders may request part or all of the arrangement fees earlier to cover their work in case you don't accept their offer. Arrangement fees vary depending on the proposal but are typically 1% -2% of the loan amount.
Valuation Fees: A surveyor will visit the property and write a valuation report looking at the condition of the property, future saleability and rental demand. Commercial valuations are based on an individualised quotation which is obtained by the lender upon application.
Legal Fees: You’ll need to pay both your own legal fees as well as the lender’s.
Broker fees: This is the fee for arranging the mortgage and is typically around 1% of the amount borrowed.