June 2012 - First 4 Commercial
29Jun2012

Commercial Mortgages explained – The application process

Commercial Mortgages explained  A brief overview of the application process

I am often asked by my clients “what is the process from here” or “what do we need to give you to get this underway”. This is becoming such a common request that I though it’d be best to try and explain what lenders are looking for from clients from start to finish in the current commercial mortgage market in the UK when trying to obtain commercial finance.

Stage One – The initial enquiry

Here at first4commercial.com we have our own enquiry form this is the first stage in our application process, when looking to secure commercial finance for our clients. The completed enquiry form along with the last 3 years company accounts is normally enough to be able to secure a decision in principle from a panel lender. A decision in principle is exactly that, a lender has confirmed that based on the information supplied (but subject to full application) in principle they are happy to provide the finance requested.

Once we have a decision in principle secured from a lender we provide our clients with a full Heads of Terms Illustration, this breaks down exactly what the rates, fees and terms of the proposed mortgage will be making absolutely sure that there are no hidden costs or fees to the client. Everything carried out up to this stage is done so absolutely FREE of charge. So, if the client decides that the finance secured for them is too expensive they can decide not to proceed and not lose a penny.

Stage Two – The full application

Once our client has decided that the terms provided are satisfactory we ask them to sign the Heads of Terms Illustration to confirm they have read and understood it and also it doubles as our instructions to act for the client. Upon receipt of the signed terms we are able to provide the client with a comprehensive list of requirements from that specific lender in order to get the case to full offer as quickly as possible.

Most UK lenders will expect to have the following items before an offer can be issued:

  • Application form
  • Identification – Passport or Driving Licence
  • 2 x Proof of address – Utility Bills etc
  • Last 3-6 months bank statements for the client
  • Possibly the last 3-6 months business bank statements if borrowing in a company name
  • Last 3 years full accounts for the business
  • Copy of any leases or tenancies – If an investment property
  • Plans, planning permission and a schedule of costs and works – If development loan

 

The above list is a guide only and is not exhaustive, different lenders will have different requirements.

Once we have collated all the relevant paperwork for a specific case this is submitted to the lenders underwriting team for approval and sign off. If all OK the next stage is to get a valuation instructed so that the lender has an independent appraisal of the security property(ies).

As long as there aren’t any issues raised in the valuation report and the property values at the level anticipated the case will be passed to the lenders credit team for final checks and offer to be issued.

Stage Three – Offer through to completion

Once an offer has been issued it is down to the lenders and clients solicitors to liaise with one another to get the relevant conditions satisfied and all final legal matters agreed. At this stage there is not a lot for us to do, we are always on hand if any issues arise or clients require anything explained to them that they are unsure of. If, however, this is a legal issue we will direct the client back to their solicitor as this is not our area of expertise.

Stage Four – Completion

Once both sets of solicitors have satisfied the lenders conditions in the mortgage offer and all legal searches etc have been completed, they will arrange for the exchange of contracts (if purchase) and/or the completion date to be set for transfer of funds from the mortgage lender to the solicitors account. Once funds have been received by the solicitor your property  purchase can be completed and you own your property or if refinancing any existing charges/mortgages are paid off and the balance is transferred to you for the purpose to which you intended.

That’s the process as clearly as could be explained and as you will see this highlights the need to have a good Commercial Finance Broker in place to help guide you along the way. Our vast experience and knowledge will help prevent any unnecessary hiccups, ensuring a smooth transition though the mortgage process.

 

first4commercial.com Colchicums, The Vale, Stock, Ingatestone, Essex CM4 9PW

T: 01277 620083 F: 01277 658900 E: info@first4commercial.com

15Jun2012

Bridging finance explained . . .

A FRESH LOOK AT BRIDGING FINANCE

 

Ensure your customers get the right advice and at the right price, avoid the pitfalls of the bridging market by using an experienced commercial mortgage broker. 

 

The most common misconception is that bridging loans are only to be used as means of providing finance to secure a new property whilst waiting for their own property to sell. Bridging finance has many other uses in the current property market outside of this “normal” approach.

Auction properties are a common arena for bridging loans these days with the bridging lenders more flexible in their underwriting and approach. Access to finance is available FAST and allows clients to purchase property quickly and in most cases as a “cash buyer”. We are seeing more and more clients purchasing dilapidated properties to renovate and sell or alternatively keep and rent out. This new purchaser can use bridging finance a “hunting facility” so that when the right property comes up they haven’t got to worry if the finance is available it is a matter of when.

Bridging finance can be used for any legal purpose and can be secured on residential or commercial properties. First, second and even third charges are be available.

Loan to values (LTV) vary across the market with up to 80% available, 100% if additional security can be provided.

Most brokers or introducers that do not understand a product will instinctively shy away from it. The fear of the ‘unknown’ creeps in.

This is where first4commercial.com can help. We provide clear, transparent advice about bridging products and their uses.

With our no obligation FREE quotations, we can place your new bridging enquiry and explain all the costs involved in the transaction before your customer spends a penny.

We pay our introducers 50% of all commission earned, this is typically 1% of the loan amount which is a great additional income stream to any brokers or introducers who do not currently have an outlet for their bridging finance deals.

Double commissions can also be achieved by most introducing brokers & IFA’s by providing a new mortgage to repay the new bridging finance.

 

first4commercial.com Colchicums, The Vale, Stock, Ingatestone, Essex CM4 9PW

T: 01277 620083 F: 01277 658900 E: info@first4commercial.com

 

13Jun2012

The Race Across America starts today . . .

The team are all in Oceanside, California in over 100F heat ready for the Race Across America 2012 to begin at 12pm Pacific Time.

Our solo rider, Chris Armishaw has passed all the initial checks and tests for both the bikes, himself and the support crew (of which our Director David Myers and his sSon James are a part of). We will be keeping this blog up to date with all the latest information as and when we have it available. I can also highly recommend the Racing Team Essex blog for more up to date information from the support crew on the road:

http://racingteamessex.blogspot.co.uk/

We hope that in 10 days time we be the first to congratulate Chris on successfully completing the challenge of 3,000 miles across America in under the 12 days allowed, this is no mean feat.

Chris and the support team have been helped greatly by several large sponsors (first4commercial.com being one of these) and without this he wouldn’t have been able to take on this great challenge. He will have to tread a fine line between sleep and cycling to achieve his goal as he will be in the saddle up to 18 hours a day. All the way along he will be supported by the Human Performance Unit from the University of Essex who will keep an eye on his calorie intake and nutrition along with all the necessary health checks along the route.

Good luck Chris and see you at the finish line . . .

3,000 miles in 10 days across 12 states

300 miles a day burning up to 18,000 calories

5 hours sleep and on the saddle for 17+ hours a day to achieve the target distance

170,000 feet – Total climb across the course

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