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There
are two main types of commercial mortgage :
1.
The Interest-only method:
You pay the lender interest during the term,
then pay the outstanding capital back at the
end of the term. To do this you use an investment
vehicle and the proceeds of this 'should' pay
off your loan. However you may end up with a
surplus, or a shortfall.
(The potential for instability with the interest
only method of repayment is why the this method
is the most common mortgage deal.)
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2.
Repayment method - basically guarantees that you will
pay off the commercial mortgage loan at the end of
its term.
Now that we have established the main types of commercial
mortgages available in the UK, lets look at the Mortgage
Interest Rate:
The capped rate commercial
mortgage - is a combination of fixed and variable
mortgage. There is a maximum rate, over which you
will not be charged for a certain period. If the Standard
variable rate falls below the indicated cap, your
payable rate follows it downwards.
The fixed rate commercial mortgage
- you pay a certain level of monthly payments for
an agreed period. You can thus budget with increased
confidence and are protected against a rise in base
rates. The fixed rate period could be up to 25 years,
or as low as 6 months [after which you revert to the
standard variable rate].
Finally The variable rate commercial
mortgage - interest rates can go up or down.
therefore the interest rate could stay constant and
be the same for many months, or it may change a number
of times over just a few months. Generally the standard
variable rate will be the same as the Bank of England
base rate.
YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS
ON A MORTGAGE OR OTHER LOAN SECURED ON IT.
What is a commercial mortgage?
A commercial mortgage is quite similar to a standard
residential mortgages, but collateral the is business
property as opposed to residential. The interest rates
charged are usually higher than for residential property
and the length of the loan can range from 5 - 30 years,
with payments due monthly.
We have produced in conjunction with Godbold a new website dedicated to property development finance, this new website offers a wide range of services along with online contact forms. For more information and to view the site click here.
All
of our quotations for commercial mortgages
are provided by an approved authorised
independent intermediary business partner.
Our approved independent intermediary
business partners provide free independent
advice and quotes to ensure you receive
the very best price and service for your
business insurance. All of our commercial
mortgage quotations are supplied free
from any obligation. |
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