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Why Choose Us
Mortgage costs undergo regular corrections, which influence the market of loans a lot. With the right choice of a finance strategy to back up your project, you can take the most even out of ever-fluctuating interest rates. Thanks to commercial mortgages, a bigger number of individuals and business entities can scale their projects and achieve their goals in a more anticipated and cost-efficient manner. Stay tuned to get acquainted with the concept and its practical realization in more detail. Onwards!
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Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
22.08.2024
Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
22.08.2024
When Are Commercial Mortgages Used?
You borrow money and secure the chosen financial product against your property — that’s how any type of mortgage works. When it comes to a commercial mortgage, along with performance peculiarities, this version is associated with purchasing real estate or land for business-oriented ambitions. Whether your aim is to contribute to your buy-to-let profile, secure a target location for further business scaling, or just buy new premises for your company, commercial real estate loans come in and help you cover the associated spending from a long-term perspective.
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In order to safeguard your financial ties and prevent unfavourable changes to the agreement in the long run, you must carefully select the source of the commercial mortgage. It is crucial to locate a loan partner who delivers the desired type of funding for your needs but also offers affordable rates and qualifying requirements you can cater to. Given that even the greatest can fail, as was in the case of Silicon Valley Bank, which collapsed in less than forty-eight hours and lost over 60% of its stock price, considering the bank’s health is absolutely essential.
With plenty of factors to pay attention to when choosing the right lender, the following are worth examining first:
- available choices of loans;
- interest rates and their type (adjustable or fixed);
- personal-guarantee standards;
- time-in-business and documentation requirements;
- related fees, including prepayment penalties.
- customer feedback and reviews.
Today’s best buy mortgages
Latest mortgage best buys
Based on a mortgage of £300,000 at 75% LTV and 25 years
| Speak with Us | Interest Rate | Mortgage Type | Monthly Repayment Amount | Total Fees | Max LTV |
|---|---|---|---|---|---|
 | 3.79% | Fixed | £1,174 | £30 | 75% |
| 4.09% | Fixed | £1,198 | £0 | 75% |
| 4.12% | Fixed | £1,210 | £1,499 | 75% |
| 4.24% | Fixed | £1,224 | £1,025 | 75% |
Once you have decided what type of loan you are interested in, you can check online calculators to see potential loan details. However, requesting loan estimates from target lenders in the market will provide more precise results — analyse them to define the best and most suitable deal. Average rates of commercial mortgage borrowing rates can be discussed very roughly. Every scenario is highly personalised because lenders have to adapt the plan to the present conditions:
- the kind of business loan you pursue;
- your credit and trading history to define your creditworthiness;
- the real estate property value versus the loan’s value to specify the associated risks — the bigger the loan-to-value ratio, the bigger the risks and interest rates you can expect;
- the loan’s anticipated duration.
Another factor that might influence interest rates is your decision to pay or not with lender credits and points — so-called discounts in the form of upfront charges to reduce the expected interest rate.
While the bespoke nature of business mortgages varies a lot on a case-by-case basis, you also have to consider the location of lenders across the country. There might be fewer options to choose from in certain regions, and some representatives in the niche won’t back up the deal in regions with restricted postcodes.
Final Thoughts
With services like Ascot Mortgages in the UK, you won’t have trouble looking for and comparing commercial mortgage that suits your payment capacity and financial plan. The analysis of several options guarantees you can get a deeper insight into the market and see whether better service conditions can be expected. It is simpler to opt for personalised decisions than it might seem with the assistance of professional third parties.
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Alison Gibson
Ascot Mortgage Expert
Remortgage
Remortgaging is applied when you keep
living in your present property while applying for another mortgage deal with a new lender. Before finding out how to remortgage and get the best offers from experts like Ascot Mortgages, you have to check meeting what parameters of the deal that can help you succeed the most. The range of background factors varies a lot — from the recently changed loan-to-value ratio or your existing agreement coming to an end.
Whether you are trying to get a more beneficial deal or searching for funding to improve your home conditions, remortgaging is one of the most advantageous scenarios to consider.
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FAQ
Yes, you can use a commercial mortgage to refinance an existing property. However, it is important to consider whether refinancing is the best option for you as there may be other financial benefits of holding onto your current loan. For instance, if you have a fixed-rate loan, refinancing could mean losing this benefit and being exposed to increased interest rates. Additionally, there may be costs associated with refinancing such as early repayment fees or legal and administrative costs. Therefore, it is important to speak to a financial advisor before making any decisions. They can provide further advice on your individual circumstances and help you determine whether refinancing is the right choice for you.
When applying for a commercial mortgage, it’s important to understand what factors lenders consider when assessing your application. Generally speaking, lenders will assess things like:
- Your current financial situation – this includes your income, asset value and other debts;
- Your credit history – this helps lenders determine whether you have been able to meet your current financial obligations;
- The location of the property – lenders may consider factors such as local market conditions and rental demand when assessing a commercial mortgage application;
- The type of property you’re looking to purchase – this includes things like the size, condition and purpose (i.e. whether it is residential or commercial).
It’s important to note that different lenders may prioritize these factors differently and may have specific criteria unique to their lending policies. Consult us and we will provide personalised guidance and help guide you through the commercial mortgage application process.
Yes, there can be tax benefits associated with a commercial mortgage. Here are a few common tax benefits that business owners may enjoy:
- Mortgage Interest Deductions: Interest paid on the commercial mortgage is generally tax-deductible as a business expense. This means that the interest portion of your mortgage payments can be subtracted from your business’s taxable income, potentially reducing your overall tax liability.
- Capital Allowances: Capital allowances allow businesses to claim tax relief on certain qualifying expenditures related to commercial property. This includes items such as fixtures, fittings, and equipment within the property. By claiming capital allowances, you can deduct a portion of the qualifying costs from your taxable profits, reducing your tax liability.
- Depreciation: Commercial properties are subject to depreciation, which allows business owners to account for the wear and tear of the property over time. Depreciation expenses can be claimed as deductions against taxable income, reducing the amount of tax owed.
- VAT Reclaim: If the commercial property is VAT registered, businesses may be able to reclaim the Value Added Tax (VAT) paid on the purchase price or certain costs associated with the property. VAT reclaims can result in significant tax savings for businesses.
It’s important to note that the specific tax benefits and allowances can vary based on factors such as the nature of the property, business structure, and individual circumstances. Tax laws and regulations are subject to change, so it’s advisable to consult with a qualified tax professional or accountant to understand the current tax benefits and implications associated with a commercial mortgage in your specific situation.
The approval process for a commercial mortgage typically ranges from 4 to 8 weeks, but the duration may be longer if the purchase is more complex.
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Legal
Ascot Mortgages authorised and regulated by the Financial Conduct Authority and can be found on the FCA register (www.fca.org.uk) under reference 776062. The FCA do not regulate some forms of mortgages. The guidance and advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate it will be £599 per mortgage account. Ascot Mortgages Ltd give you the option to pay a non-refundable fee of £1299 payable with the application. If this option is taken, Ascot Mortgages Ltd will refund any procuration fee received by the lender.
Ascot Mortgages Limited is registered in England and Wales and have their registered office at 8 Webster Court, Westbrook, Warrington, WA5 8WD. The company’s registration number is 06764971.
We are a credit broker, not a lender. We work with the whole of the lending market. We may receive commissions that will vary depending on the lender, product, or other permissible factors. The nature any commissions model will be confirmed to you before you proceed.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT
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