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Commercial Mortgages

A Commercial mortgage is a mortgage loan secured on residential investment property, commercial property, such as an office building, shopping centre, industrial warehouse, or apartment complex. The proceeds from a commercial mortgage are typically used to acquire, refinance, or redevelop commercial property.

Commercial mortgages are structured to meet the needs of the borrower and the lender. Key terms include the loan amount (sometimes referred to as "loan proceeds"), interest rate, term (sometimes referred to as the "maturity"), amortization schedule, and prepayment flexibility.

Commercial mortgages are generally subject to extensive underwriting and due diligence prior to closing. The lender's underwriting process will include a financial review of the property and the property owner (or "guarantor"), as well as commissioning and review of various third-party reports, such as an appraisal. For commercial mortgages we act as introducers only.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Loan amount

The loan amount of a commercial mortgage is generally determined based on loan to value (LTV) and debt service coverage ratios, more fully discussed below in the section on underwriting standards. Usually a minimum deposit of 25% is required. For the right applicant this can be reduced but other security may be needed.

Loan structure

Commercial mortgages can be structured as first liens or, if a greater loan amount is desired, the borrower may be able to obtain subordinate financing as well, sometimes structured as a mezzanine note or as preferred equity, which generally carries a higher interest rate.

Interest rate

Interest rates for commercial mortgages may be fixed-rate or variable rate. Fixed-rate mortgages on commercial property are generally priced based on risk and loan to value, with the. Market interest rates as well as underwriting factors greatly affect the interest rate quoted. Interest rates for commercial mortgages are usually higher than those for residential mortgages.

Fees

Many commercial mortgage lenders require an application fee or good-faith deposit, which is typically used by the lender to cover underwriting expenses such as a valuation on the property. Commercial mortgages may also arrangement fees (paid at close as a reduction in loan proceeds) and/or exit fees (applicable).

Term

The term of a commercial mortgage is generally between one and twenty five years, for investment properties on a repayment basis typically a longer term is required.

Commercial mortgage Lenders

Our brokers will look through the various lenders and deals available to suit your circumstances.

Below are a few of the lenders we talk to

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Norwich & Peterborough building society Logowww.nandp.co.uk
Lloyds Bank Logowww.lloydsbank.com
Barclays Logowww.barclays.co.uk
Natwest Logowww.natwest.com/
Aldermore Logowww.aldermore.com
Santander Logowww.santander.co.uk
Shawbrook Logowww.shawbrook.co.uk
Coutts Logowww.coutts.com
Handelsbanken Logowww.handelsbanken.co.uk



On clicking the above links you will leave the regulated site of Bright Money Independent Ltd. Neither Bright Money Independent Ltd, nor Sesame Ltd, is responsible for the accuracy of the information contained within the linked site.

You can choose how Bright Money Independent Ltd are paid for mortgages; typically we do not charge however, you can pay a fee, usually 1% of the loan amount,
in cases that more work is required we may agree a fee upfront before any work is undertaken.
For Equity Release we are typically paid by the lender, however we offer a fee only service which is 1.5% of the loan amount.
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