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When Commercial Mortgage Makes Sense!

Tue, 06 Sep 2011 07:35:40 +0100

If there is anything second to gold, it is probably real estate. This is where liquidity is changed into a highly rewarding asset class. Full time rents, development opportunities, time shares and more, many would say once you own property there is no shortage of channels of revenue. There is also an opportunity for scale: whether you construct a high rise corporate tower, inviting businesses, food chains and retailers in or erect a hotel and play host to the pantheon of tourists, travelers and businessmen checking in and out from time to time and splurging on premium luxuries, the opportunities are as big as your ambition. It has been shown that in the long term Commercial property is one of the better performing asset classes so it’s not surprising why it is so coveted by many investors.

Possibly that’s why investors don’t mind large amounts of money for commercial properties. They know what true worth commercial property has. They don’t mind buying a commercial land on bridging finance and later securing a commercial mortgage to pay it off. And if it is planned nicely, it’s not surprising to see upward growth in asset value and asset revenue.

The loans are generally made for about 10 years and secured against the property. If the payments are missed, it is repossessed. Typically such financing options are used:
•    To buy new premises
•    For extending the existing premises
•    For commercial and residential investment
•    For developing any property for other purposes

Commercial Mortgage and why it makes sense
If you or your business is looking to purchase premises or wishing to include commercial property to your portfolio, commercial financing is what you need. It can be difficult acquire with a lengthy approval process, sometimes high interest rates and even personal guarantees sometimes required. Nevertheless, without sufficient cash in hand to finance a purchase it remains the most sensible way of getting financing to expand a property portfolio or grow a business.

Let’s have a look at why commercial mortgage makes more sense than other forms of business financing.
•    Tax benefits: In most cases, mortgage repayments are tax deductible. HM Revenue and Customs (HMRC) usually regard the interest payments as allowable expense for tax purposes. So if your business ever buys a commercial property on mortgage, you can use the payments in Self Assessment tax return or company accounts for tax deduction.

•    It is cheaper than business borrowing: While commercial mortgage is not the only way to procure finance, it may be cheaper than other methods. Since the loan is secured lending, it is cheaper than unsecured loans and credit. In fact many companies consolidate their debts through commercial loans.

On the other side, commercial loans may ask the borrowers to put down a significant percentage of the total amount to secure the deal. The payment may go as high as 30-40% in some cases. Similarly, borrowers may be required to deposit guarantee besides the collaterals.

Having said that they are viable options, possibly a little more than other unsecured loans. So if you plan to acquire commercial properties or land, expand facilities or refinance debt, commercial mortgages may be the way forward. As always though, be sure to consult an Adviser when making your decision.

Copyright © 2011

What you need to know about a Secured Loan and Unsecured loan

Tue, 23 Aug 2011 09:36:05 +0100

1. What You Need To Know About a Secured Loan

A secured loan allows an individual to use their personal property as security to obtain a loan. By placing a charge over personal property, the bank is reassured that they are not at high risk of losing any money if you happen to default on any payments. The charge however is a second charge and so must sit behind a pre-existing mortgage. Somewhat surprisingly then, it is the case that if you don’t already have a mortgage and your property is unencumbered, then you can’t get this kind of loan! It is also important to note that in the event of default, the bank is entitled to foreclose on your property which can then be sold to recover the debt. Since this type of loan requires you to place a charge on your property until the loan is paid, the interest rate attached to the loan is usually more beneficial and the term can be longer – up to 20 years. The alternative of taking a loan without security most likely leads to a more punitive rate - this is the primary advantage of the loan. In addition, even those with poor credit histories can borrow if they have enough equity in their property; usually total borrowings can go up to 85% LTV.

How individuals can gain from a loan?
As with all loans there are some disadvantages, most notably in this case that your property is at risk if repayments are not made, however there are several positive factors too. Many people on this type of loan have had poor credit histories and by leveraging the free equity in their property they allow themselves an opportunity to borrow and, in making repayments, rebuild their credit record and their credit score. This is a great opportunity for a person to prove they are capable of paying off a loan they may not have had the opportunity to take in most cases.

2. What you need to know about an unsecured loan?
An unsecured loan involves borrowing money from a lender without having to supply any collateral (such as personal property) for security purposes. Usually the term is no more than 5 years. In the current financially straitened times, being approved for this type of loan usually means you have had no or little trouble maintaining a positive credit report that reflects your accountability to pay what is owed in a timely manner. However, don’t expect it to be cheap! Though base rates are at 0.5%, loan rates start at about 8% for even the most prime credits! If you have had a questionable credit history then rates quickly hit double or for some even eye-watering triple digit interest rates! Clearly it pays to maintain a good credit record!

How individuals can choose the best loan possible
Which is the best kind of loan for you? It depends on your circumstances and requirements. Are you happy to secure your home or would you rather not? Is the interest rate and repayment term important to you? Weigh up these factors and you can determine which is right for you.

Copyright © 2011

Everything You Need To Know About a Commercial Loan

Mon, 22 Aug 2011 08:37:52 +0100

If you are in the process of expanding an existing business or taking the first steps to becoming your own boss, there are several steps to take until your company is up and functioning properly.
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If you are in the process of expanding an existing business or taking the first steps to becoming your own boss, there are several steps to take until your company is up and functioning properly. A great way to expand a business is to locate a business site in which you can set up and run as your company. In order to raise the finance to purchase such a premises you must find a lender who is willing to lend to you based on the value of the property you are buying. This is called a commercial loan and is similar to your traditional home loan but with slight differences. Firstly the LTVs are lower than with home loans as business viability is riskier. Usually a maximum of 75% LTV is available though sometimes higher can be achieved. Secondly the income of the business, rather than the individual, is analysed as a priority. And finally, even after all this, the individual may be asked to offer Personal Guarantees as security. It’s a complex field and therefore speaking with a commercial mortgage specialist is highly advisable.

How to get the best rate for your money?
Once you have made the final choice to expand your business and have located professional help, it is important you sit down with your banker and discuss your financial situation and what you plan to spend, in order to build a successful business. A business loan is very hard to come by especially if you have had past judgments against you that may lower your chances to obtain a loan. One option that has been successful for other business owners is going directly to the same bank in which approved you for their home mortgage loan. The great thing about a local bank that has established a relationship with you already is the trust factor that is present in every mortgage payment you have made in the past up to this point in order to increase your credit score. Many also have several incentives available to their customers to apply for a commercial mortgage loan including discounted rates lower deposits.

When to put your offer on the table?
Once you have found the perfect building for your business it is up to you to act quickly to secure it. You will always be in a stronger position as a Buyer of you can show finance in place so it is worth discussing with you bank in advance of your search to see what funds are available to you It is likely they can pre-approve you based on certain scenarios and give you an idea of what it is you can afford. With finance in place you can then go about negotiating the best deal. Nothing sways a Seller’s price more than the thought of a clean transaction with cash up front – this will always be your most powerful negotiation tool. At last, when you have signed the contract and settled all disputes you can now sit back and enjoy the freedom that comes with knowing your business premises are secure.

Copyright © 2011

What you need to know about a Secured Loan and Unsecured loan

Mon, 22 Aug 2011 08:38:37 +0100

A secured loan allows an individual to use their personal property as security to obtain a loan. By placing a charge over personal property, the bank is reassured that they are not at high risk of losing any money if you happen to default on any payments. The charge however is a second charge and so must sit behind a pre-existing mortgage. Somewhat surprisingly then, it is the case that if you don’t already have a mortgage and your property is unencumbered, then you can’t get this kind of loan! It is also important to note that in the event of default, the bank is entitled to foreclose on your property which can then be sold to recover the debt. Since this type of loan requires you to place a charge on your property until the loan is paid, the interest rate attached to the loan is usually more beneficial and the term can be longer – up to 20 years. The alternative of taking a loan without security most likely leads to a more punitive rate - this is the primary advantage of the loan. In addition, even those with poor credit histories can borrow if they have enough equity in their property; usually total borrowings can go up to 85% LTV.

How individuals can gain from a loan?
As with all loans there are some disadvantages, most notably in this case that your property is at risk if repayments are not made, however there are several positive factors too. Many people on this type of loan have had poor credit histories and by leveraging the free equity in their property they allow themselves an opportunity to borrow and, in making repayments, rebuild their credit record and their credit score. This is a great opportunity for a person to prove they are capable of paying off a loan they may not have had the opportunity to take in most cases.

2. What you need to know about an unsecured loan?
An unsecured loan involves borrowing money from a lender without having to supply any collateral (such as personal property) for security purposes. Usually the term is no more than 5 years. In the current financially straitened times, being approved for this type of loan usually means you have had no or little trouble maintaining a positive credit report that reflects your accountability to pay what is owed in a timely manner. However, don’t expect it to be cheap! Though base rates are at 0.5%, loan rates start at about 8% for even the most prime credits! If you have had a questionable credit history then rates quickly hit double or for some even eye-watering triple digit interest rates! Clearly it pays to maintain a good credit record!

How individuals can choose the best loan possible
Which is the best kind of loan for you? It depends on your circumstances and requirements. Are you happy to secure your home or would you rather not? Is the interest rate and repayment term important to you? Weigh up these factors and you can determine which is right for you.

Copyright © 2011

Choice Loans is in a privileged position of having access to ALL Secured Loans lenders in the market. If you need short term cash and either are a tenant or you don't wish to offer your house as security you could get an Unsecured Loan.

Things you need to know on debt management

Wed, 13 Jul 2011 10:37:33 +0100

If you are struggling each month to pay your bills and you seem to go deeper and deeper into debt, maybe it’s time to get some help. Debt management services are a good option, providing you with tailored solutions for your financial problems. Debt advisors can suggest a course of action to you that will get you out of debt, without negatively affecting your credit score.

Why getting debt management help
When you juggle with debts from multiple creditors, such as several credit cards, personal loans or payday loans, you are probably paying high interest rates on each of them. Also, in such a situation it’s easy to forget about the repayments for a certain credit card, for example, which leads to even higher interest rates and more debt – it’s a vicious cycle. If you ask for assistance from a debt advisor, the first step will be to take into account all the loans you might have. Then, the debt advisor will analyse the interest rates for each loan and will try to figure out the right solution for repaying all of your debts. Usually, this means consolidating the debt, by using a loan from a single lender, with a better interest rate, to consolidate all your debts. Once you do that, it will be a lot easier for you to remain financially disciplined, since you have only one monthly repayment. Consolidating debt also saves you money each month, because the debt advisor will help you find better interest rates. If consolidating the debt is not an option for you, the debt advisor will negotiate with your lenders to achieve better terms for you; this could mean stretching the length of the credit period, obtaining better interest rates and so on. Also, you will benefit from financial advice on how to organize your personal finances to avoid falling in the same debt trap again.

How to find reliable and affordable debt management services
There are lots of organisations providing such services, from non-profit organisations to private companies specialising in this field. With non-profit organisations, the advantage is that you don’t have to pay any fees. However, the quality, the efficiency and the timeliness of the services might not be what you need. This is why it’s better to purchase professional services from reputable financial consultancy companies. Make sure you perform a background check and read testimonials and reviews on a certain company before entrusting them with information about your financial situation. Ask details on the services they provide and make sure you will pay them fees only if they manage to obtain definite results. The debt management help market is not a very regulated market so you need to be very careful when purchasing services in this area.
Also, you need to keep in mind that your personal commitment to becoming financially responsible is the most important part of the equation. If you manage to consolidate your debt, but you still keep missing repayments, you will end up back where you started!

Copyright © 2011

Choice Loans is a Loans, Mortgage & Commercial finance broker provide Bridging Loans, Secured loans and Payday loan lenders in the UK.

How to make loans work in your favor

Wed, 13 Jul 2011 10:35:11 +0100

An unsecured loan is a loan you obtain without collateral. There are multiple advantages associated with this type of loan, but also some disadvantages. Applying and obtaining the loan is pretty simple takes very little time. A lot of different kinds of applicants are accepted by lenders for this type of loan: fully-employed, part-time employed or even unemployed, homeowners or tenants. Also, you have the freedom to use the money in any way you wish. However, since you have no collateral on the loan, the interest rates are usually higher then those on secured loans and the sum of money you can get is generally limited to £5,000 or £10,000 pounds.

Advantages and disadvantages of an unsecured loan
If you need some cash fast, this type of loan can help you a lot. Most lenders approve the loan in a matter of days. If you have bad or no credit history, such a loan it’s a good way to build good credit history and obtain better interest rates in the future. Also, unsecured loans can help with debt management. If you have a lot of credit card debts with very high interest rates, the best strategy is to get a loan that comes with better interest rates and to fully pay your credit card debt. When applying this strategy, a secured loan or a remortgage is the best idea. However, not all people have those possibilities. If you are a tenant or a homeowner who can’t remortgage, usually any type of unsecured loan will have better interest rates than your credit car. A plus too is that the loan is not related in any way to your home, which means that, if you experience financial difficulties, your home will be safe. Another major advantage is that most of the loans come with fixed interest rates for the entire repayment period, offering peace of mind over repayments.
But this type of loan also has some disadvantages. Since there is no collateral, the lender will give you money based on your credit history. If you have poor credit history, you’ll likely have a high interest rate. This loan is a great solution for times when you need some cash fast but you should only apply for one only if you are certain you’ll be able to cover for the monthly repayments. Piling up debt will complicate your financial situation.

Find help with debt management
If you are experiencing financial difficulties, getting professional advice is a good idea. The first step for clarifying your financial situation is to make a list of all your debts and to analyse the interest rates you are paying for them. If possible, try to obtain a new, cheaper loan and cover for the old debts. When you can’t find the right solution on your own, you can ask for help from Debt consolidation advisors. They can provide you the whole range of solutions to consolidate your debt: individual voluntary arrangements, debt management plans or even bankruptcy.

Copyright © 2011

Choice Loans is a Loans, Mortgage & Commercial finance broker provide Bridging Loans, Secured loans and Payday loan lenders in the UK.

How to benefit from bridging loans

Wed, 13 Jul 2011 10:31:01 +0100

Bridging loans can be the right solution for individuals or companies if they need short term financing for investments, usually real estate investments. As the name clearly shows such loans are a temporary solution until you manage to obtain money from another source or to get a long-term loan. For example, if you just found your dream house, you absolutely want to buy it but it will take a while until you manage to sell your current home, you can use this type of loan. You will be able to purchase the new property and you’ll have enough time to sell your current home for the right price. However, you need to remember that such loans shouldn’t be a first choice for individuals or businesses. They come with relatively high interest rates and unless you are certain that you will be able to repay them after a short period of time, you may be better with other finance options.

Advantages and disadvantages of bridging finance
The biggest positive of this type of loan is that it allows you to take advantage of real estate investment opportunities. Bridging lenders can generally approve loans quickly especially if you have a low Loan-to-Value. If you are certain that you’ll be able to repay it fast then it’s a good solution. However, it’s important to opt for a deal with no early repayment charges so you can clear the loan immediately when you have access to better finance.
Bridging loans also come with disadvantages. Access to such immediate finance comes at a cost: interest rates are with a few points higher then for long-term loans, there are also arrangement, valuation, legal and possibly broker fees to be paid on top so make sure you know all the costs before signing in for such a loan. Before getting such a loan it’s wise to use a broker and shop around for the best terms.

Types of bridging finance
There are two main types of bridging loans: closed bridge and opened bridge. If you already exchanged on the sale of your old property, the chances for the sale to fall through are very low. Thus, the lenders will approve a closed bridge financing for you. If you’re in this situation, it’s important to discuss two aspects with the lender: first of all, find out if the lender can offer you a no early repayment deal. Secondly, ask about mortgage options. It’s easier for you to refinance your closed bridge loan with a long-term mortgage through the same lender – less paperwork.
If you didn’t put your existing property on the market or you simply weren’t able to sell it yet, but you want to go ahead and purchase a new house, then the lender will offer you an open bridge loan. Get one only if you are sure you will be able to sell the old property in a few months and repay the high interest rates loan otherwise it will quickly become very expensive.

Copyright © 2011

Choice Loans is a Loans, Mortgage & Commercial finance broker provide Bridging Loans, Secured loans and Payday loan lenders in the UK.

How to make profitable real estate investments

Wed, 13 Jul 2011 10:29:23 +0100

There are a lot of reasons for considering a remortgage. When your initial mortgage deal comes to an end, you might notice a significant increase of the interest rate and hence your monthly repayments. If that’s the case, a remortgage might work in your favor, helping you to obtain a better interest rate or to release equity. If you already have a lot of equity in your property, remortgaging is a good way to consolidate your other debts. You have the opportunity to borrow money at an attractive interest rates and use it to cover debts with very high interest rates, such as credit card debts.

When it comes to the best remortgage deals, there are several things to consider, beside the interest rate: the fees that the new mortgage is carrying, the overall annual percentage rate, the standard variable rate the mortgage will revert to or how long the remortgage process will take. Even if the interest rate sounds good, other expenses can actually turn the remortgage into a pretty expensive deal! Be sure to ask the lenders about the total costs of the remortgage. Also, you need to evaluate remortgage offers from as many lenders as possible, in order to find the one that suits your needs. If you decide to go with your existing lender, then the remortgage process should be fairly easy and fast for you; however if you are shopping around for offers from other lenders you could feel overwhelmed by numerous possibilities and for this reason hiring a mortgage broker is helpful. He can help you select the best remortgage deals and file your remortgage applications quickly and effectively.

Are buy to let mortgages a good idea?
If you’re interested in buy to let mortgages UK offers you great opportunities. The principle of buy to let mortgages is very simple: borrowers hope that, by renting the newly purchased property, they will be able to cover the monthly repayments of the mortgage and become owners of the property with very low costs. Well, this can work, but only under certain conditions. First of all, you need to find a property in a promising area. It will be very difficult to find tenants in a place where people don’t want or don’t need to be. Economically dynamic areas, where a lot of students, young professionals and temporary employees live, with good public transportation services and appealing surroundings are the best. Before deciding to invest your money, research the market, to make sure that the rent is enough to cover for the monthly repayments. Also, you have to consider the fact that the interest rates can go up, while the rent may not, or that the property may not always enjoy 100% occupancy. Ask yourself if you will be able to cover the monthly repayments on your let to buy mortgage without the rent revenue. All in all, when it comes to buy to let mortgages UK is the land of great investment opportunities, but only if you choose the right property to buy and carefully assess your options.

Copyright © 2011

Choice Loans is a Loans, Mortgage & Commercial finance broker in the UK provide Best Remortgage Deals, Turkish Mortgage and also Help with Debt Management.

Advantages and disadvantages of secured loans - Choice Loans

Tue, 05 Jul 2011 10:24:37 +0100

Secured loans are loans where the borrower secures his loan as a second charge against his house. Since the collateral used by borrowers is his home, this type of loan is also known as homeowner loan. One important feature of a secured loan is that in order to qualify for one, the Borrower must already have a mortgage with some free equity (the first charge). Both the lender and the borrower benefit from this type of loan. On one side, the financial institution lending the money has greater security that it will be able to recover the money, even if the debtor stops paying while the borrower, on the other hand, will enjoy better rates and will be able to borrow flexibly with a relatively quick arrangement period.

Advantages of secured loans
If you need a substantial sum of money and you need it fast, a secured loan can help you get it without having to deal with complex procedures and valuations from the bank – if the LTV is low, very often no formal valuation is done at all! This can really speed up the approval process. Since you guarantee the payment of the loan with your house, the bank is completely covered in case you cease payments. This allows the bank lend at better rates than in the case of personal loans. In some cases the lender can hold the deed or title of your home until the loan, including interest and other fees, is fully repaid.
In certain situations, this type of loan can help you save a lot of money. If you accumulated a lot of credit card debt and you also have personal loans, you can refinance them through a new loan with better rates. Putting your house as collateral will get you better interest rates from the bank. You can use the money to pay all the old debts carrying sky-high interest rates thereby saving you hundreds of pounds each month.

Disadvantages of a homeowner loan
Of course, these loans also have some disadvantages. The most important one is that if something unexpected occurs and you can’t keep repaying the loan, you could lose your home. This is why, when applying for a loan, you must make sure you can afford the monthly payments in any circumstances. Try to imagine the worst-case scenario: for example, if you lose your job and you can’t find another one for a few months, will you still be able to repay your loan and keep your home safe? As always, don’t borrow more money then you need and don’t agree to monthly payments that are too high for your current income. Like any other financial services, this type of loan requires a responsible attitude. Use the loan to your favour: obtain money for important investments or to refinance very expensive loans. If you use the money to refinance historic debts, make sure you monitor your finances better this time and you won’t end up back in the same place in a couple of years’ time.

Choice Loans is a Loans, Mortgage & Commercial finance broker in the UK provide Best Remortgage Deals, Turkish Mortgage and also Help with Debt Management.