In the present day, there is a thriving business in buying, renovating and reselling or leasing homes. Many people save up until they are capable of getting on this reselling ladder. Others have the capital to begin without having to make concessions. There are options for those looking for a way in, or to turn over a property a bit out of their price range.
Benefits and facts
A commercial mortgage is a loan secured on a premises which is not your premises. It can allow you to buy up a property which you can’t ordinarily afford. The price range generally extends upwards from around £25,000 and takes over from where business loan values ends. There generally last from somewhere between 3 to 25 years. How else does a commercial mortgage differ from other mortgages:
- There are usually no fixed rates.
- You will usually pay a higher interest rate as they can be considered more high risk.
- Tend to offer better interest business rates as the property can be used as collateral.
- The interest is tax-deductable.
- If the property value increases, the capital can too.
- You can rent out the property to generate extra income.
What do I need to consider?
You may still be able to apply for a commercial mortgage if you have a poor credit rating. You can account for it by adjusting the interest rates. The deposits needed can be sizeable so it’s a good idea to be absolutely certain you want the loan. They are a form of secured loan where the property is leveraged against the value, so failure to pay can mean losing control of the desired asset, remember your Consumer Rights.
If you are looking to get a start in the property business, or if you are looking to consider a leap to a higher value property, a commercial mortgage can make the difference for you.