How Business Mortgaging Works In Ireland - Perspective Of An Independent Mortgage Advisor

 

Whether you are looking to buy, build, refurbish or extend your office, shop, warehouse or any other business premises, you can fund it through a Business Mortgage or Commercial Mortgage. You may take this as a practical alternative to curb expenditure of increasing rental costs. Furthermore, if you are already owning the property, you might as well use it for remortgaging and reuse those funds for savings or investment. Here is an insight into the highs and lows of business mortgaging along with tips and best recommendations by independent business and finance advisors.

While residential mortgages can be quite one-dimensional with the loaned money being secured against the property, there may be greater aspects of a business mortgage.

Other than having your own space and evading lump sum rent, maintenance fees and managerial liabilities, it might also be a business refinancing strategy to release equity from the existing property and utilise it for the growth of the business.

 

●     You can buy a new property with the mortgage funding, like an office, studio, warehouse, manufacturing unit or other business premises from where you can operate your business.

●     You may use the cash to purchase land and finance the development of a new building from scratch

●     You may extend an existing, owner-occupied property such as a Hotel, BnB, Workplaces with operating wings etc.

●     You may renovate a vacant property

●     Invest in buy-to-let property to grow your income

●     You might also use Commercial Mortgaging for business acquisition

●     Or even get Part Commercial Mortgages 

 

Many business advisors across Ireland are recommending mortgages as a viable option for funding commercial growth whilst maintaining ownership of business property, especially if you have assets that can be used to secure against the loan.

 

Now, there are many variants of Business Mortgages that come with different levels of borrowing as well as interest rates for commercial spaces and owner-occupied properties. The availability and selection of the ideal option depending on how you intend to use the property.

You may seek the guidance of a mortgage broker or advisor to have a clear understanding of these variables and how they will work for your requirements.

Why And How To Consult A Mortgage Advisor In Cork

In the simplest depiction, getting a Commercial Loan takes just two steps - applying for the loan and waiting for approval! But if you look at it as a Lifecycle, you would have a lot of steps to meet during the application, and throughout your approval process. Here is a brief overview of it:

 

●     Researching and finding the right lender

●     Understanding the dos and don’ts of applying to mortgages

●     Calculating your eligibility and mortgage limit

●     Steps to take to secure your Credit Rating with minimum enquiries

●     Projecting your financial situation with avid clarification

●     Creating and professing your business plan

●     Meeting the challenges of less-than-ideal credit history 

 

Applying for mortgages does not affect your credit score readily. It is when your loan application moves the lender to check your Credit Rating so as to declare your loan eligibility, at that moment it affects your credit score - when a lender checks it. So you see if you have a way to know your eligibility without losing your credit score - you may do so on your own. But if you are particularly looking to calculate your mortgage by it, that path goes through a Mortgage Advisor’s office. Because they don’t assess your credit rating as a lender but rather on your behalf.

 

Independent mortgage brokers are not tied to any lenders or financial institutions. They simply keep a tab on financial schemes and policies available in the market and particularly work to provide clients with personalised recommendations.

Getting A Mortgage InIreland 

 

The loan terms are based on the value and size of the property, and repayment plans can vary from 3-year tenures and up to 25years. The terms are also determined by the amount of your deposit.

The maximum Loan-to-Value (LTV) is 75% that you can get in Ireland, but based on general credit history the standard ratio is just about 65% to 70%. While deposits vary from 30% to 35%. What type of business you have might also impact the sum of deposit your lender will ask you to pay. Businesses with a high risk model, such as restaurants, pubs, clothing boutiques, software and hardware services and products et al are likely to be asked to pay a greater amount of deposit.

 

The documents you need for a seamless application process include:

●     Bank statement for 6months to 1year

●     Records of Liability and Asset Statements

●     Projected and Current Performance Records

●     Tax Return details of Minimum Three Years

                                               

 

It is a good time to consult with a mortgage broker before you apply to any lender. But even if you have applied, you may seek the guidance of such an independent professional who may be able to guide you through specific complexities.

 

Author Bio

The author has worked closely with a financial broker in Cork for writing purposes. And with all the knowledge and understanding she gained on the job, about mortgages, investments and business financing in Ireland, she is going to pour all for your kind information. Stay tuned

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