Commercial mortgages can vary significantly in value, costs, terms, and applications – so working with an experienced broker is the first step in constructing a deal that helps you meet your business goals at an affordable cost.
There are thousands of brokers out there, making it difficult to select the right professional team to help you make informed borrowing decisions.
Today, Revolution Brokers shares some of our tips to ensure you pick a commercial mortgage broker with the skills and knowledge to get you the right deal from the right lender.
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Picking an Experienced Commercial Mortgage Broker
The first factor is to look for mortgage brokers with the right experience. Established brokers have wide networks of contacts with all the major lenders, plus niche mortgage providers offering products outside the mainstream market.
Brokers with years of expertise can provide fast advice, make clear recommendations and get things moving quickly.
You can research information online, check out client testimonials or ask about their relevant experience to see whether they have worked on similar requirements for other commercial mortgage applicants.
The Benefits of an Independent, Whole-of-Market Business Mortgage Broker
Independence is key since a broker tied into a specific brand or partnership network can only suggest a fraction of the potential commercial mortgage products out there.
Likewise, if you consult an adviser at a banking branch, their role is to assess which of their products you are eligible for and sell to you accordingly – not advise on things like:
- Alternative borrowing products that may be more suitable.
- Other lenders offering more competitive rates.
- Ways to strengthen your application and secure a better offer.
Whole-of-market is equally crucial and means a broker has free reign to recommend any product from any lender that they feel will be to your advantage.
Commercial mortgage brokers who are not whole-of-market will have a limited scope of products to choose from and are highly unlikely to offer the service standards you need to make clear borrowing choices.
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Commercial Mortgage Broker Costs and Fees
Undoubtedly, costs will be a big factor in setting up a new commercial mortgage deal, and you should always go into any business relationship armed with information about the anticipated charges.
Given the vast range of commercial mortgage products, the fee structure can vary, so that might be:
- Upfront fees based on the borrowing amount required.
- A percentage of the value of the deal.
- Payments rolled up into the initial mortgage repayment.
- Fee-free advice, where the lender covers this cost as an incentive.
Revolution always offers clarity about associated costs so you can decide which options work for you, as well as impartial advice about all the other fees, such as valuations, legal charges, and arrangement costs.
We can also look at any existing commercial mortgage products or loans to advise whether there are opportunities to remortgage or consolidate debts at a lower interest rate.
Finding a Commercial Mortgage Broker With the Right Capacity
Commercial mortgages can vary from small loans to purchase a first trading premise to multi-million-pound deals with numerous moving parts – thing bridging loans, exit strategies, development finance, and multi-unit mortgages.
If your broker specialises in specific mortgage values, they may not have the connections in the market to negotiate a favourable rate.
For example, if you need a commercial mortgage for £2 million, but your broker usually works on deals of £10 million and above, they may not be up to date with the best rates available or the most competitive products within this value range.
We’d also suggest choosing a broker with knowledge about other loan products.
As we mentioned earlier, a commercial mortgage is one of many different potential borrowing options, so you may need financing for a construction project, for instance, which isn’t eligible for a conventional mortgage.
Closing Your Commercial Mortgage Deal Quickly
If time is an important factor, and you need to get your deal finalised quickly, it’s crucial to discuss expected completion time frames before you begin.
Most commercial mortgages take a good couple of months to organise, although that depends on several variables, such as:
- How much you need to borrow.
- Where the property or site is located.
- The nature of the commercial borrowing product.
- Availability of trading records and financial history.
- The lender’s time frames for evaluations and underwriter’s checks.
- Any non-standard circumstances or credit issues.
Revolution Brokers works with hundreds of UK businesses looking for tailored, independent advice to ensure their commercial mortgage deal meets their exact requirements.
Our first step is to work through consultation to get to know your aims, why you need a commercial mortgage, and then conduct whole-of-market research to ascertain the best routes to go down.