Commercial property mortgage - any help/advice?

jellyhead80

My sister is renting a hair salon and she now wants to buy the property. She has had information from her bank (lloyds) but was wondering if there are any search engines/comparrison sites that compare business mortgages so she knows she is getting the best deal. I have tried moneysupermarket for her but i can't find it compares business mortages.

So any help or information would me most appreciated. Her info is £90k for property and wants to borrow £80k over 25 years if possible. Lloyds gave her options of fixed and variable so she is open to any advice. Many Thanks for any help.

Laura

dunstonh

See a mortgage broker that can place commericial mortgages.

Is she buying the property in or outside of a pension? If its being bought inside a pension (and therefore getting tax advantages), then she would need to see an IFA and accountant too.

jellyhead80

Hi, Thanks for your adivce,

She is buying the property outside of a pension, I searched on the web for commercial mortgage brokers but there are so many, do you have any reccomendations?, as it is hard to know whether they are trust worthy and unbiased.

Do you think it is safest to stick with a bank or business society or an independent?

dunstonh

Do you think it is safest to stick with a bank or business society or an independent?

Put it this way, would you want to be sold products by someone offering only one product or from someone that can source the whole market and show you the research to support that recommendation?

I searched on the web for commercial mortgage brokers but there are so many, do you have any reccomendations?

Stick with independent mortgage brokers, go with a local firm rather than a regional or national salesforce and ask friends/family if they have used anyone independent as word of mouth if often a good way.

AndrewSmith

You will find, as dunstonh says, that your local Mortgage Broker may actually have access to commercial mortgage lenders.

I am currently in the process of setting up a separate commercial section to my own firm. (Not touting for business, merely demonstrating that some residential brokers also deal in commercial mortgages).

There are guidelines to consider before you approach a broker or lender.

You may borrow up to 85% of the 'Property Value' on a commercial mortgage.

You cannot mortgage the fixtures and fittings, stock, or goodwill aspect of the business. This must be purchased either by cash of business bank loan. You will need the selling agent to give you a breakdown of these elements.

The property must not contain more than 40% residential element (ie flat above etc).

Once you can satisfy the above, then you are in a position to begin looking at how to finance the purchase.

Hope this helps

Andy