Categories: commercial mortgages | guides

Securing a commercial mortgage for a property for your business or investment portfolio can be complicated and time-consuming. With the help of a commercial mortgage broker, you can simplify the process and secure a great deal from a wide range of lenders – some of whom will only accept cases via an intermediary.

A commercial mortgage broker is a financial intermediary between individuals or businesses looking to purchase commercial properties and lenders offering commercial mortgages. With access to a wide range of lenders and industry expertise, brokers help ensure you receive the best mortgage for your needs.

In this article, we discuss the benefits of using a broker and highlight the fees you can expect to pay.

Why use a commercial mortgage broker?

Working with a broker can save you time, money, and effort in obtaining a mortgage for your commercial property. To ensure you receive the benefits, it is important to find a specialist broker that can meet your specific requirements.

We highlight the benefits of using a commercial property mortgage broker:

A commercial mortgage broker helps you find a lender quickly

Brokers have established relationships with an extensive variety of UK lenders. This ensures that they will quickly match you with a lender that offers specific lending criteria suited to your needs. 

The complex nature of commercial borrowing means the application process takes longer than a standard residential mortgage.  So, the speed of service a broker can offer upfront means you know as soon as possible which lender will offer you a good deal.

By working with a broker, you can also minimise delays in the application process. This is because brokers have an in-depth knowledge of each of their lender’s unique application requirements. This allows you to move forward with the application process efficiently, increasing the speed of receiving your mortgage.

A commercial mortgage broker will help you find the best product option

Commercial mortgage brokers provide tailored advice, to ensure you receive the best mortgage for your specific needs and circumstances, from a wide range of lenders. 

A broker will work with you to understand your financial situation, future goals, and business objectives. Based on an in-depth understanding of this information, they will source a deal that will provide you with the best possible terms for your mortgage from a huge number of available products.

A commercial mortgage broker can also help with particularly tricky scenarios or situations where someone may struggle to secure finance.

Say for instance you are looking for a bad credit commercial mortgage. A “bad” credit score can make it challenging to secure financing. A broker can assist you in finding lenders that are willing to work with businesses or individuals with poor credit histories.

Whilst the deals available to you may have higher interest rates, a mortgage that moves you forward and enables borrowing can be replaced with another in time that meets your improving circumstances.

Commercial mortgage brokers have 'real-time" market knowledge

Brokers have up-to-date knowledge of the mortgage market, including interest rates, market trends, lender requirements and service levels.

A commercial property mortgage broker’s real-time market knowledge can provide individuals and businesses with these benefits:

  • Current interest rates and trends: A broker will provide you with up-to-date information on current interest rates and market trends. This can help you make informed decisions about when to purchase your commercial property and what terms to look for in your mortgage. This can help you save money or make a great investment decision to build your property portfolio.
  • Insights on lender criteria: A broker will advise you on the specific lender requirements that you will need to meet to secure financing. This can include deposit, property type, business accounts, personal income information, and other criteria that are specific to the lender and the type of property you are looking to purchase. This expert advice can speed up your application process and help ensure you your deal completes.
  • Terms tailored to you: Brokers gather together all the information necessary, to present your application to the lender that offers you 1) the most competitive deal cost-wise and 2) terms that meet your needs and circumstances. This means the deal suits your immediate and future plans and also minimises the risk of the deal being refused at the underwriting stage of the application process.

What fees do I pay to a commercial mortgage broker?

Choosing a broker that charges a fee is a very sensible approach to take. Why? Because that broker is motivated purely by what is best for you.

For example, each lender pays a different ‘procuration fee’, which is money they pay to an intermediary (broker) for putting together a client case and in essence doing preparatory work to ensure the case is right for that lender. Where a lender has higher rates but offers a bigger procuration fee, an unpaid broker may be influenced to recommend that deal to you, despite it not being the most cost effective option for you.

Paying a broker a fee means you are covering the cost of their work, so they are given the ability to be thorough, tenacious and determined to exhaust every avenue to find you a cost effective solution.

Paying a broker fee also means you should expect world class customer service from first ‘Hello’ to the point the funds are paid and onwards to your renewal. It gives the broker the ability to put all the necessary resource behind servicing your needs as possible so the process is easy, relaxing and straightforward.

Commercial mortgage broker fees are typically calculated as a percentage of the loan amount. Certain brokers may charge a set fee for their services. You might pay the broker fee once the mortgage is completed. Alternatively, the fee may be split between an upfront and a completion fee.

Before you start working with a commercial property mortgage broker, you need to have a firm understanding of their fees. This will ensure that you fully understand the costs involved, before committing to the mortgage.

As a starting point, you can calculate commercial mortgage payments to have a better understanding of the mortgage cost. This will provide you with a monthly figure that you will need to pay each month, helping you to make an informed decision on whether to choose a mortgage or not.

Get in touch with a commercial mortgage broker at Commercial Trust

Secure a great deal and enjoy world class customer service with Commercial Trust’s commercial mortgage brokers. You will get access to a huge range of  commercial mortgage rates and lender criteria, to accommodate all sorts of properties and borrowing needs.

Contact us today to learn more about how we can help you secure a commercial mortgage.