August 2018 - First 4 Commercial
27Aug2018

A Quick Guide to Commercial Mortgages

What is a commercial mortgage?

A commercial mortgage is loan used to buy a commercial property, such as an office building, industrial factory, or retail space. This type of mortgage differs from a traditional residential mortgage, typically being a much larger loan that comes with higher interest rates and costlier deposit.

What are the benefits of a commercial mortgage?

The main advantage of a commercial mortgage is the amount you can borrow. As the loan is designed to pay for a commercial property or purchase an entire business, the value of the loan is significantly higher than other lines of credit, such as a residential mortgage or business loan.

As a result, commercial mortgages allow businesses to grow and expand their operations, whether it’s investing in new property or taking over a smaller business.

Understanding commercial mortgage rates and borrowing amounts

A commercial mortgage usually comes with a minimum borrowing amount, typically around £50,000, as there are high administrative costs associated with loans of this amount.

Furthermore, lenders require borrowers to provide a percentage of the loan in a deposit, which varies from around 20% to 40% depending on the lender. So, any business looking for a commercial mortgage must have cash reserves to pay the deposit.

Also, commercial mortgage interest rates are either fixed or variable, meaning there are various options available for loan terms and interest rates. The length of the loan can vary significantly too, with mortgages available for just a few years and other that last for decades.

23Aug2018

A Quick Guide to Mortgage Brokers

What is a Mortgage Broker?

A mortgage broker is an expert in mortgages, providing mortgage advice and acting as a point of contact between borrowers and lenders.

Not only do they recommend the best types of mortgages based on your circumstances but act on behalf of the borrower to get the best mortgage possible, such as searching for the best mortgages, contacting banks, negotiating fees etc.

What are the benefits of a Mortgage Broker?

There are various reasons to use a mortgage broker, most notable receiving expert advice from someone that works directly in the industry. Mortgage brokers have contacts with various institutions that helps them get better deals than you would on your own.

They also provide mortgage advice for those interested in applying for a loan, give suggestions on suitable mortgages, and looking in the market for the best mortgage they can find.

This improve the chances of getting a great deal on mortgage and removes much of the hassle associated with finding a mortgage, so its very convenient for many people looking to buy a home.

Mortgage Broker Fees Explained

It is important to remember that mortgage brokers charge fees for their services, with rates varying from each broker, so be sure to shop around for the best rates.

For instance, a broker charging a fixed rate costs a flat fee for all the services, commission-based brokers are paid by the lender they secure the loan with, while commission-based brokers take a percentage of the final selling fee, while other brokers charge.

15Aug2018

A Quick Guide to Commercial Mortgages

What is a commercial mortgage?

A commercial mortgage is loan used to buy a commercial property, such as an office building, industrial factory, or retail space. This type of mortgage differs from a traditional residential mortgage, typically being a much larger loan that comes with higher interest rates and costlier deposit.

What are the benefits of a commercial mortgage?

The main advantage of a commercial mortgage is the amount you can borrow. As the loan is designed to pay for a commercial property or purchase an entire business, the value of the loan is significantly higher than other lines of credit, such as a residential mortgage or business loan.

As a result, commercial mortgages allow businesses to grow and expand their operations, whether it’s investing in new property or taking over a smaller business.

Understanding commercial mortgage rates and borrowing amounts

A commercial mortgage usually comes with a minimum borrowing amount, typically around £50,000, as there are high administrative costs associated with loans of this amount.

Furthermore, lenders require borrowers to provide a percentage of the loan in a deposit, which varies from around 20% to 40% depending on the lender. So, any business looking for a commercial mortgage must have cash reserves to pay the deposit.

Also, commercial mortgage interest rates are either fixed or variable, meaning there are various options available for loan terms and interest rates. The length of the loan can vary significantly too, with mortgages available for just a few years and other that last for decades.

6Aug2018

A Quick Guide to Business Loans

What is a business loan?

A business loan is a type of loan provided to commercial organisations seeking to expand their operations. Available as a short or long-term loan, business loans are used for a variety of business expenses, such as hiring new staff, purchasing new inventory, moving property, or paying off debts.

What are the benefits of a business loan?

A business loan offers a range of benefits for an organisation, from providing an injection of cash flow to providing some financial respite during tougher times. Also, business loans come with various terms to suit each type of business, with both long and short-term borrowing options available.

Newer businesses can better establish their organisation with a business loan, while others can use the loan to growth their business further, so there is no end to potential advantages of a business loan.

Types of business loans

When applying for a business loan there are two options available – secured and unsecured.

A secured loan involves borrowing money against a certain asset as a form of collateral. Should the loan not be paid back on the agreed terms then the lender may sell the asset to pay off the debt, making it a riskier option for a business.

Unsecured loans are the opposite, allowing a business to borrow money with needing to use a company asset as a form of collateral, therefore being viewed as a far more low-risk type of business loan.

6Aug2018

A Quick Guide to Bridging Loans

What is bridging loan?

A bridging loan is a type of short-term designed to bridge the period between due payment and available credit. Perhaps the most common use of a bridging loan is to purchase property before a mortgage has been cleared, making a very useful form of credit in various situations.

Bridging Loan Benefits

The main benefit of a bridging loan is being able to make a quick purchase while waiting for a line of credit to clear.

For example, if you want to buy a property that is only available for a short period, but your mortgage application has yet to be approved, then a bridging loan can be used to bridge the gap between buying the property and receiving your mortgage.

Another example of this would be buying a new property before your current home has sold. As this can take longer than anticipated, a bridging loan allows buyers to purchase a new property while awaiting the sale of their current property.

Bridging Loan Rates

It is important to understand the rates of a bridging loan.

As a short-term loan, bridging loans come with higher interest than most other loans, especially mortgages, with an average monthly interest rate of around 4% in most cases.

Also, admin fees are commonplace for bridging loans, so be mindful that there are additional costs compared to a mortgage.

That said, as bridging loans are intended for short-term use only, the higher interest rates aren’t as expensive if you pay the loan off as soon as you secure a mortgage or sell your property.

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