Clients looking for owner-occupied property may be buying an office for a new or existing business.
If it a new business, the lenders will look at the individuals personal experience and financial situation to determine whether the loan required is affordable.
For existing businesses looking for new premises, the lender will review the last 3 years trading accounts to get comfortable that the business is healthy. Generally, the loan amount approved will be based on EBITDA (earnings before interest, taxes, depreciation and amortisation) and the value of the freehold being bought.
Investors buying offices to let out will normally be required to put down a 25% deposit and the loan amount agreed will depend on the rental yield and stress testing, similar to a standard buy to let mortgage.
The building may also be mixed use, whereby part of the building is commercial and part of the building is residential. For example, the ground floor of a building could be an office and the flat above could be let out on an assured tenancy agreement. As there is an element of commercial in building, even if it only equates to 25% of the whole building, a semi-commercial mortgage will be required.
No matter what the circumstances, Magni Finance can help by introducing you to one of our trusted commercial lenders, saving you valuable time.
Commercial Mortgages are referred to a third party. Neither Magni Finance nor PRIMIS are responsible for the service received. These services are not regulated by the Financial Conduct Authority and may have limited consumer protection.