A commercial mortgage is a specialist form of mortgage loan which is secured against commercial property such as an office building, shopping centre, industrial warehouse, or housing complex. The proceeds from a commercial mortgage are typically used to acquire, refinance, or redevelop commercial property.
Commercial mortgages are structured to meet the needs of the borrower and the lender and differ greatly to a residential mortgage. Key components to a Commercial mortgage are, the loan amount (sometimes called the "loan proceeds"), the interest rate, the term of the loan (sometimes referred to as the “maturity date”, the amortisation schedule, and the terms relating to prepayment flexibility. Commercial mortgages are generally subject to extensive lender underwriting and due diligence prior to offer. The underwriting process may include a financial review of the security property, the property owner (or "sponsor") and the tenant of the property. It will almost always the commissioning and reviewing of various third-party reports, such as a business valuation.
Banks are the principal source of commercial funding in the UK followed by commercial lenders, Government finance initiatives and life insurance companies.
Mortgage ID have excellent connections with a broad spread of key commercial lenders within the UK and abroad. Call our commercial lending desk on 02920 394401 or click the box below for a call back to find out more.