Not having to rely on rental contracts that only last for a year to a few years in most cases means it’s easier to predict and calculate long term business costs, as with a commercial mortgage, the payments will remain relatively stable. There will be no large increases in rent to contend with, a commercial mortgage will give you a monthly repayment plan at a set rate, meaning it could be cheaper overall than renting a premise.

Owning your own building also gives you the scope to play the role of landlord yourself. It should be looked at if your current workspace is too large or you have enough room, sublet it to another company or partition the space into several spaces and gain several tenants. This could be a very effective way of covering your own commercial mortgage payments.

So What Are The Best Advantages of a Commercial Mortgage?

The benefits you could have just don’t stop there; did you know any commercial payments are tax deductable? That’s right, in the majority of cases, not all sadly so you need to double check, payments can be classed as a tax expense and deducted from your gross profits.

Another of the indirect goodies a commercial mortgage delivers is the option to avoid having to sell a stake in your company for capital injection. Using the equity in your commercial mortgage is a self generating way to get the cash you need to expand or pay debt off without chipping away at the control of your company.

As already stated a few times, commercial mortgages are overall more stable than renting as you can plan longer term for costs than every year or few years to see how much the rent will increase.

Who Is Responsible For The Commercial Mortgage Repayments?

That all depends on how you have structured your business, though it still roughly follows the same set up as residential mortgages. Sole trader will have all liability and responsibility on their shoulders for the commercial mortgages, partners in a company will be responsible as a pair but also individually.

In a company structure with several directors, they will all be liable for the commercial mortgage and its repayments. Each will have to submit a personal director’s guarantee, which are necessities with most lenders, in which the directors will assure the lender they will take responsibility for the commercial loan.

How Much and Over What Term Can I Borrow?

The time period for commercial mortgages has a ceiling of 20 years, reduced to 15 years for older premises. Interest only commercial mortgages are available, but most will convert to capital mortgages after a certain number of years, so discuss all potential options with lenders.

Lenders will be more willing to approve a commercial mortgage with a low LTV rate, so the more you can bring to the table as a deposit, the better your chances of being accepted. Minimum deposits are much higher for commercial mortgages than residential mortgages, the threshold beginning at 20% at least, though the some lenders could ask for as much as 30% up front. The other advantage of a larger deposit is the rates offered for the borrowing will be lower as well, reducing the interest to be repaid.

Howard writes for Just Commercial Mortgages the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.

You may need to move home as you have a growing family or because you need a bigger house. However, you may want to keep your existing home as you believe it is a good investment. In this instance, a let to buy mortgage would be the ideal solution for you.

How Do Let To Buy Mortgages Work? When applying for a let to buy mortgage, the lender will work out what they are prepared to lend you based on your income and outgoings without taking your existing mortgage into account. Lenders often make the assumption that the rent you will receive from letting your existing home will cover the mortgage payments.

In line with many buy to let mortgages – where you borrow money to buy a property with the sole intention of renting it out – you will typically need a 25 per cent deposit. This has been particularly true since the ‘credit crunch’ of 2008 where banks have become more cautious about their lending.

What Interest Rates Do Let To Buy Mortgages Offer? Let to buy rates have hovered at around the 5 per cent mark but there is soon likely to be an increase. Monetary Policy Committee of the Bank of England has made it clear that although there has been no rise recently in the base rate of interest, there is likely to be one in the next six months.

What Does the Lender Require? Both the new property and the original one would have to be surveyed to get valuations on them both. The value of rental income potential would also need to be determined for the existing property to ensure that it will cover the mortgage repayments.

If you feel your current home is going to rise in value very well in the future, but have to move to larger house or closer to work, then let to buy is a very healthy option to consider or take on as a solution.

As the property market recovers it might be a good time to think about building a portfolio in property, and a let to buy is a very versatile way of doing that. It is worth remembering that whilst the property bubble has burst temporarily, the trend over time is always an appreciation in property values.

If you don’t want to lose your home, but need to relocate for whatever reason, let to buy mortgages are a great way to keep your property and ‘expand your empire’ by having money invested in bricks and mortar.

It is also important to check whether or not the property is leasehold or freehold. If you find out that it is leasehold, then you need to find out what the terms of the lease are regarding letting to tenants.

Howard writes for Just Commercial Mortgages .com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.

The offset mortgage was an Australian innovation originally, and they have been a feature of the mortgage market in the UK since 1997. The idea is quite straightforward. Every borrower has a mortgage, along with a savings account. It is possible to build up sums in the savings account and then pay them into the mortgage periodically so the overall balance of the mortgage is reduced.

This where the ‘offset’ in the name comes from, you’re offsetting your mortgage with the savings from that account. The major attractiveness of these mortgages is the fact that you can save thousands in interest payments as you pay chunks off from your savings account, with the tagged on bonus your mortgage is paid off at an increased rate. Still with me then?

As you’re paying off lump sums, over time you’ll save a small (or potentially large) fortune on interest. Not only that, you’ll also be shrinking your mortgage a whole lot quicker than on a normal mortgage.

Offset mortgages are much more fluid than and not as structured as a fixed rate mortgage, or even an interest only mortgage. It’s more possible to overpay on the mortgage (in fact that’s the idea!) and you won’t be subject to penalty charges for it as it’s taken out the savings account. Yet there is also more scope for underpayments also, taking a month payment holiday is easier if you’re jetting off on holiday yourself and need the extra cash!

Most standard mortgage contracts don’t allow overpayments, so for allowing you the privilege of this you will usually not earn any interest on money sat in the savings account linked to your mortgage. Instead, the payments just come off the balance of the mortgage whenever you want them to.

One of the problems faced by lenders who offer offsets is that there is a perception that they are too complex and risky and just too unfamiliar to borrowers for them to feel they are an attractive proposition.

Whilst having savings in your linked account will help you reduce your mortgage interest payments and help you pay your mortgage off faster, you should remember that you don’t receive any credit interest on your savings. They are designed to save mortgage interest, not generate credit savings interest.

Whilst in the past, according to lenders London & Country, offset mortgages have made up a mere ten per cent of the mortgage market, they have grown in popularity in recent years and are closer to taking a 15 per cent market share. As this happens and they become more mainstream, many of the concerns about them will hopefully be dispelled.

As with all mortgages or remortgages, we recommend making an appointment with an Independent Financial Adviser, aka an IFA, or an independent mortgage broker for impartial and whole of market advice. People in general are starting to look beyond fixed rate and interest only mortgages to more marginal options such as offset, discounted or capped mortgages, talking to an IFA can set you set you straight and figure out which is the best option for your circumstances.

Howard writes for Just Commercial Mortgages .com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.

The latter part of 2010 was not looking good, with commercial lending appearing to level off and banks being reluctant to offer commercial mortgages to new and upcoming businesses. But this changed in the first part of 2011 when markets began to rise, and it is thought that this could be to do with the new Government project.

The statistics showed that in the last part of 2010, businesses had no money available in order to help the market grow, as commercial mortgages were unobtainable to many. It was also clear from the figures that commercial property purchases were down.

Commercial property sales in the first quarter of 2011 are also set to be extremely strong, RICS reports. 18 per cent of surveyors believe that demand would be strong over the next few weeks with many claiming that the commercial property market is set for its best quarter in four years. Activity is set to increase and sales look to be strong.

The data also seems to defy the rather gloomy predictions about the quantity of available properties. Four per cent of surveyors reported an increase in supply of commercial property, not a decrease. Major property group Knight Frank reported in January that the limited number of commercial properties available in London was resulting in steep rises in the capital’s commercial property prices.

The same story was not being told across the rest of the country however, and the same estate agent confirmed that this was because as the economy begins to recover, regional differences would be extremely clear for some time until the markets catch up with one another.

Even though there are signs that the commercial property market were getting better, commercial mortgages still remained unobtainable for many small businesses who were hoping they may now be able to get onto the property ladder to aid growth within their firms.

The report reveals some alarming statistics. It shows that out of the 107 lenders (banks or other financial institutions) in the UK that have commercial real estate loans on their books, only two thirds, just 69, are still actively lending. Since 2007, there has been a stampede for the exit by lenders from the commercial property market. Head of European debt advisory at CBRE Real Estate Finance, Natale Giostra said: “There are lots of lenders with appetite to lend, but they are being very selective and there will be a lot of cherry-picking in the loans they are willing to make. There is no one bank that is willing to offer every type of loan now.”

Although Project Merlin is now in full swing, it would appear that the targets may be unrealistic, considering that many of the commercial lenders are no longer in the commercial markets. This means that the remaining lenders who are still offering commercial mortgages have to work much harder to lend out enough to hit the targets in order to receive their bonuses for this year.

For the foreseeable future, it would appear that growth will be slow, and it may take some time before lenders see the commercial market as less of a risk.

Howard writes for Just Commercial Mortgages .com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.

Speak To A Financial Adviser – If you’re not an expert on mortgages the best thing to do is speak to an adviser or a broker who know the market and will know the best lenders to approach, as well as the best products that are out there.

Whilst the rental income may be important to the lender, your personal income will also be taken into account when they are underwriting your loan application. A lender will want to ensure that you have income that can continue to pay the mortgage in the event of rental voids; periods where you do not have a tenant in the property.

What Are The Advantages? – There are clear advantages to a buy to let mortgage, if it suits your circumstances and future financial plans. The mortgage on an extra property can be paid off by tenants and not by yourself, so for the last two decades, with rising property prices, it has been an excellent way of investing for the future.

Since the ‘credit crunch’ of 2008, buy to let mortgages have become more scarce. Whilst they were extremely widely available over the last decade as property prices were rising, many lenders have withdrawn from the investment property market over the last couple of years. However, there are still many great buy to let mortgage deals available; you may just have to look harder for them.

You’ll normally still need to have an income so that if the property is empty the lender knows that you can afford to cover the mortgage for that period, although income levels do not generally need to be so high, as such circumstances should only be temporary.

Make Sure You Research The Market – As with other financial products, it is vital that you undertake some research when deciding on a buy to let mortgage. Deals and criteria can vary significantly from lender to lender and so it is important that you shop around to find the very best buy to let deal for you.

Seek Advice If Necessary – Mortgage brokers are professionally trained and qualified. This means that they have an excellent knowledge of how buy to let mortgages work as well as access to a wide range of mortgage deals from throughout the UK market. You may pay a mortgage broker a fee for their services, but this may well be worthwhile if they can find a market leading buy to let mortgage for you.

Location is crucial – Buying an investment property also requires careful research. You should make sure you buy in a location with strong rental demand as this will not only ensure that there is a ready supply of prospective tenants but should also ensure that rents remain high.

Insurance isn’t an Option, It’s required- building and contents insurance is needed, contents especially if you are offering a furbished property. Building insurance will be demanded by the lender’s already, never forget to expect the worse such as fire, you want to be covered for every eventuality.

Howard writes for Just Commercial Mortgages .com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.

Well this is where shared ownership mortgages come in. It’s when you buy half of a property, and another organisation, usually a housing association, will buy the other half.

These types of mortgages have greatly increased in popularity in recent years as it has become very difficult for first time buyers to get on the property ladder unless they have a large deposit available to them, so there are plenty of great deals available out there if you shop around.

You will only own the part that you take the mortgage on. In most cases the housing association will buy anything from 25-50% of the property, and you will buy the remaining share, so you won’t own their 25 or 50% and you must remember this.

One thing that everyone during a recession is trying to limit is risk. Shared ownership mortgages help with this because they are less risky; half of the property has already been bought out. Lenders are keener on allowing higher loan to value, which means they are more likely to lend a borrower a higher percentage of the property’s value.

It is possible to purchase your property incrementally through a ‘staircase’ option. This option means that you can purchase more of the property from the housing association later on. Check with your scheme provider if this option is available as it is not standard in all deals, but well worth taking up if it is

As banks and building societies demand ever higher deposits to secure the best mortgage rates, it is no surprise there has been growth in the shared mortgages sector. As has already been mentioned, a shared mortgage is more likely to be approved, but it is still wise to research what is available and shop around to get the best deal possible.

Finding shared ownership deals can sometimes be tricky and so speaking to a qualified mortgage broker or financial advisor may be advisable. Brokers have a good knowledge of the mortgage market and may be able to find several shared ownership deals for you. However, bear in mind that you may have to pay a fee for their services.

If you can afford £200-£500 for advice, it’s a good idea to talk to an expert about the options as they can often also get you a better rate on ‘broker only deals’ that you will not be able to obtain elsewhere.

Shared ownership schemes have helped many people buy their first home. Rather than paying rent which doesn’t benefit you, owning a share in your home means you can benefit from increases in its value and from getting on the property ladder.

Howard writes for Just Commercial Mortgages .com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.