Commercial mortgage advice needed

tryfernowt

Hi everyone,

I am a first time buyer.

I wish to buy a commercial property, (priced at) offers in excess of £100.000.
but have never believed in getting into debt, (i am debt free) but do have savings, and could put up £20.000 as a deposit, also I am aged 56, could anyone help as to the best route for me, for good solid advise, as i don't understand all the jargon as to applying for a mortgage.

AndrewSmith

Hi,

Commercial mortgages have both similarities and differences from residential ones.

It depends mainly on what type of property you are looking to buy and whether it is freehold/leasehold. Also whether there is any residential element within it (ie shop with a flat over the top).

A commercial mortgage can only be used to purchase the building or property itself and not the business, goodwill, stock, or fixtures/fittings. This must be finded by other means ie cash or business loan.

The majority of commercial mortgages are repayment basis with the option of an initial 2-3 year interest only period to allow the business to stabilise and secure itself. As for how long they can run for, that depends on the individual proposal of the property and your own situation, as opposed to relying solely on your age.

Ideally a deposit of 25% will open up a wide plethera of rates/lenders to you however you can secure a commercial mortgage with as little as 15% deposit, but are likely to be paying an interest rate of 6.8-7% for the privilage.

You will need not only a building valuation, but may also need a business valuation, again depending on the proposal you are submitting.

Let me have a few more details and I will see what there is around for you.

Cheers

Andy

dunstonh

Have you considered or reviewed the possibility of using your pension to buy it?

Providing you are eligible, it may be the perfect answer for you.