SPOTLIGHT ON...ALEXANDER ASSOCIATES
The Business - A Lancashire Evening Post publication
A way through the commercial mortgage maze
COMMERCIAL property finance is set for a change that will bring it in line with the residential mortgage marketplace says Richard Bradley.
Applying for a commercial property mortgage can be a cumbersome and slow process. The commercial borrower is rarely provided with the levels of choice, support and professionalism that have become the norm in the residential mortgage marketplace.
At present only 14% of loans are placed via a broker in the UK, with the vast majority of borrowers going directly to their own bank.
This number is very low, when compared to the number of borrowers who use brokers for arranging their residential mortgages.
An interesting statistic from the United States is that more than 70% of commercial borrowers recognise the advantage of using a broker.
The same benefits apply to using a commercial mortgage broker as to using a residential mortgage broker, such as having the ability to search the market for the most competitive deals.
The ability to re-mortgage existing property finance on to better terms and/or releasing capital for funding further acquisitions or injecting capital into a business, is becoming increasingly in demand.
There are also significant advantages for businesses that currently rent and would like to take the opportunity to purchase their own premises. As with the residential mortgage marketplace, the commercial broker brings true consumer choice to one of the world's largest property markets, creating real competition.
This has got to be good news for everyone who is either in the commercial mortgage market, or is looking to enter into it. In the same way as reviewing any aspect of your finances, there is nothing to lose by picking up the phone to a broker and discussing the terms of your existing finance or the rates you have been quoted for a new purchase.
Our clients can often save a significant amount of time and money by using us to search the marketplace for them, negotiating less rates and improving the structure of deals. Examples of changing the structure include extending the term, longer interest only periods, increased loan to values and building in residual debt.
The flow of business will continue to increase as more borrowers recognise the benefits of using a professional broker.
At Alexander Associates the majority of our inquiries are introduced by accountants and IFAs, who have started to encourage their clients to seek independent advice on their commercial mortgages.
To learn more about our Mortgage Services please contact us on: 0207 016 6767
Alternatively click above to complete our online Morgage enquiry form.