Commercial Mortgages
If you own or are looking to buy a property with a commercial usage and you need finance for the purchase or want to raise finance against the property that you own then a commercial mortgage is the ideal solution. Commercial properties are used for the operation of businesses such as a shop or a warehouse but they can also be large properties that operate as investments such as an office block or block of flats.
The most common types of properties that will normally require a commercial mortgage are;
Office buildings
Shopping centres/shops
Care homes
Dentist
Doctor’s Surgeries
Veterinary practices
Warehouses/industrial units
Pharmacies
Blocks of flats
Nursing homes
Agricultural land
Funeral Parlours
Hotels/guest houses
You might also be looking at a semi commercial property such as a shop with a flat above it that is on the same title. Due to the commercial usage of the shopt you will not be able to take out a standard residential or buy to let mortgage so you will have to look at a specialist semi commercial product.
In general there are two type of borrowers who are interested in commercial mortgages; business owner occupiers and commercial property investors. If you run your own business and are looking to by a property from which to operare or already have one then you are a business owner occupier. However, if you are looking to generate an income from a commercial property by renting it out yo fall under the bracket of a commercial property investor.
Lenders will want to know different information and see different documents depending on which category you fall under.
If you’re a business owner-occupier, lenders will ask you to provide:
- Proof of your identity and our current address
- Evidence of your own personal income
- Financials for the business for up to 3 years – some lender may consider projections if the company is in its newly formed
- Figures relating your your trading to covering the last 3 years
- The last 3 months of business Bank statements
- There may be more that is required but the above will be the minimum that is needed.
For commercial property investor, lenders will want to see:
- Proof of your identity and our current address
- Evidence of your own personal income
- Details of the lease agreements (they will likely want to see copies of the leases) – It is worth noting that a limited number of lenders will provide mortgages for vacant commercial properties, but criteria is much stricker and the rates will be higher Proof of agreed rental income and/or yield of the property/properties
- There may be more that is required but the above will be the minimum that is needed.
Commercial properties can be extremely profitable for investors when managed correctly and more and more landlords are looking to add a new dimension to their portfolio by gaining commercial units. If your thinking about a commercial property purchase or want to raise finance against a commercial property you already own then look no further! The Friendly Mortgage Company as all the knowledge you need to secure you a fantastic rate and to guide you through the process from start to finish.