2nd-Mortgage

A commercial mortgage is usually availed if you are intending to buy a commercial property in order to start your own business or even simply for the sake of investment. Various kinds of commercial mortgages are available depending upon the type of the commercial property.

Depending upon the nature of the business you may get up to 100% or more mortgages on your venture. When your mortgage lender provides you with the full purchase value of your commercial property it is termed as 100% commercial mortgage.100% commercial mortgages are also called no deposit mortgages since they do not ask for a deposit. 100% commercial mortgage comes in various forms including fixed rate, capped rate and discounted rate.

Securing a 100 % commercial mortgage will largely depend on the nature of the business you are intending to set up. In case there is a fall in the property market you will end up owing more than your property is worth (also called negative equity).For this reason this kind of mortgage is not suitable for every business. While professionals like doctors, solicitors, veterinary surgeons and accountants are more likely to get a 100% mortgage on their commercial property some lenders also consider non-professional business. The credit background of the applicant is also important but these days’ lenders also provide 100 % mortgage to poor credit applicants.

The downside is that it is not easy to find lenders who offer 100% mortgage and when you find someone they will always charge higher than normal interest rates. You may also be required to provide any other asset as a security in lieu of a cash deposit. The asset may include residential or commercial property with remaining equity or commercially valuable land. There are also additional charges involved with 100% commercial mortgage like the legal fees and valuation fees which can be added to the mortgage total, provided there is overall security.