Commercial Mortgages - Can You Refinance Without Them?
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Commercial mortgages are the way that most entrants into the commercial property sector, whether they are investors or businesses, gain an initial access. A commercial mortgage has certain advantages over the renting of a commercial property- you have a certain amount of security as the owner, not something a short term lease can offer you. And you can participate in any increases in property value that may arise after your purchase. Also, if you are buying the property as an investment, the rental income can provide a good immediate return on that investment.
Commercial mortgages also allow you the opportunity to raise finances via the commercial remortgage- this is where you arrange a new mortgage to pay off an existing one or vary the terms of your existing mortgage. If the property has a current value that allows the repayment of the initial loan, you may be able to rearrange a new mortgage whilst leaving you with some capital realised from your property's current value.
Banks have traditionally been the first point of access for those seeking commercial mortgages, as they have access to primary sources of credit, and will often have cultivated a personal relationship with the borrower. However in recent decades, the commercial brokers have come into their own, as being better able to shop around and provide a good deal for their clients. This is because they have access to information on commercial mortgages across the market, and can quickly find the most appropriate, and cost effective, solution for you.
What has changed recently, however, is the supply of commercial mortgages - starting in 2008 a credit drought has descended across the market space. The credit crunch that began with banks reluctant to lend to each other, ended with a sharp withdrawal of the banks from the commercial mortgages market. Many commercial mortgage products have been axed; those that are left have greater deposit requirements and higher interest charges. Additionally banks have insisted on more stringent lending criteria for potential borrowers to meet.
Things are no better when going through a commercial broker- the same drought is afflicting them, and they have a much reduced set of commercial mortgages to assess. Although the credit supply has loosened a little over the last twelve months, there is another round of tightening happening now, because of fears of a second recession, the dreaded 'double dip'.
Where does this leave you, if you are in the market for commercial mortgages in order to raise finance? Well, one option is to look instead at a 'sell and rent back' arrangement, also referred to as a 'sale and lease back'. With this type of arrangement you sell your property, whilst the purchaser commits to a long term, secure lease back to you. SellMyCommercialProperty are ideally placed to help you here.
We specialise in the commercial property sector, and in particular in 'sell and rent back' agreements. We have immediate access to substantial finance, and so are not constrained by credit supply. The dedicated and experienced team at SellMyCommercialProperty are able to make initial assessments within 48 hours, if speed is of the essence, and can then expedite the sale to completion, so you receive monies fast. If your search for commercial mortgages is drawing a blank, then get in touch with SellMyCommercialProperty, and let us help you unlock the value of your property.
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