For those individuals looking for a business mortgage to purchase a commercial property or looking to financing a purchase or remortgage, a commercial remortgage or refinance package may be the perfect solution.
There are a number of lenders out there who are willing to work with these types of borrowers but it is important to know that rates for this type of financing can vary widely from one lender to the next.
Here we will explore the information you need to know about commercial remortgage/refinance…
Information on Commercial Refinance
Lenders offering commercial refinance have become much stricter with their criteria than borrowers must meet in order to secure the loan. Although this is the case, commercial mortgages still provide an excellent option for individuals looking to purchase land, property or purchase other existing businesses.
It is important to note, however, that these lenders will generally only work with brick and mortar and not goodwill and that commercial remortgage and refinance is much more complicated than residential.
While the residential refinance market is pretty cut and dry with what is and is not accepted, the commercial market offers borrowers more of an opportunity to negotiate. The interest rate associated with commercial remortgages is based on a number of different factors, including the current running mortgage rates, the track record, and credit history of the borrower, the past and projected performance of the business as well as if special financing, such as self-cert or non-status mortgages, are needed.
When it comes to negotiating the best possible remortgage or refinance deal, there are some factors a borrower can bring to the table to use as leverage in the transaction. First, it is important for the borrower to have a proven track record of success – the less risk the lenders see in the proposal, the more likely they are to approve it with favourable terms and interest rates.
Additionally, if a borrower can bring a personal guarantee to the table, it can help the negotiation process.
Types of Properties that Qualify for Commercial Remortgage or Refinance
Commercial remortgages and refinance will only cover property or land that is being used for a business purpose.
Some of the property types that will qualify for this type of financing include:
- retirement or nursing homes
- office buildings
- light industrial properties
- houses in multiple occupancies or buy to let properties
- farmland and or property
Office areas for professional practices such as:
And others among many other types of businesses.
Compare Different Lenders and Remortgage Options
When it comes to securing a commercial remortgage or refinance, working with knowledgeable mortgage experts such as Jubilee or lending broker may be a great choice. These brokers have extensive information and experience in the industry and can help borrowers to compare options and find a deal that is perfect for their unique situation.
Brokers often have positive relationships with lending institutions, which can be important for arranging a remortgage or refinance package that meets the borrower’s needs.
I remortgaged my industrial unit to find the money to buy the unit next door. It was much cheaper than some of the other brokers I spoke to.