Commercial vs Personal Re-Mortgage???

ashthekid

Hi, my dad is currently looking at ways to raise some finances to purchase another property. He owns two properties (home and business) outright and has no mortgage left to pay on either of them. Home property is valued at about £1m and business premises are worth about £650k.

We're looking at remortgaging but I want to know what the essential differences are between commercial and standard personal mortgage? Maximum terms they can be taken over and rates I would benefit more from etc? We want to raise around £500k. Would I benefit from taking a re-mortgage of £250k on the house and then £250k on the business? All options considered.

Has anyone any advice on this topic and ways in which to keep the monthly payments as low as possible.

Thank you for your time.

JoeK_3

Generally speaking, commercial interest rates are higher than domestic, as commercial loans are classed as more risky by lenders.

Domestic mortgages are assessed on personal income whilst commercial mortgages are based on profits of the business.

The decision as to which property to use will be based on tax advantages both now and in the future as decision taken today, can have severe tax implications in the future.

You should consult a good professional that understands both domestic and commercial mortgages, as usually they are kept separate due to technical knowledge and know how.

JoeK