Commercial Mortgage Information
UK Commercial Mortgage
Commercial mortgages and residential mortgages are very much the same thing in regards to using property as collateral against a particular loan. Commercial loans also allow you to enjoy the benefits of a remortgage much like a residential mortgage.
You can also use the remortgage for a line of credit to pay any large business expenses such as office equipment. You can take a mortgage to buy property to expand the office or marketplace. Most business loans have a relatively short repayment schedule but for these types of loans you can often set up a repayment period of up to 30 years and possibly more down the road.
Much like a residential mortgage if you miss any payments or go deep into arrears you can lose the property or have it foreclosed. So it is very important that all payments are made on time and that you never default on the loan.
The good thing about the interest on a loan or mortgage is that it is tax deductible and the profits made from the loan are also considered non taxable. This is why it is very important that you discuss with your accountant what spending qualifies as a business expense and what doesn’t. This will save you a lot of headaches later especially with the tax man.
Usually there are two different types of interest platforms which are fixed for a period of time or they are fixed for the life of the loan. If the loan is created for a fixed period of time the lenders could jack up the interest rate of the loan therefore increasing your cost by thousands of pounds.
Also you may want to inquire about your mortgage to see if you will get charged any fees if you make any early payments on the loan. This is commonly known as the ERC clause or Early Redemption Charge. So even if you have extra money to use towards the mortgage you could be penalized for making an early payment.
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