Frequently Asked Questions
Why do you not charge any fees?
We are paid by the lenders, like most other brokers. We do not charge as we believe it is not necessary. As a consequence, we have a large amount of repeat business.
Does not charging fees mean you offer a lesser service than brokers who charge fees?
Absolutely not. Our testimonials in our customer feedback section is evidence of this.
What is your minimum Loan?
£50,000 on commercial mortgages and £40,000 on Buy to let mortgages per property.
How quickly do you respond to enquiries?
We aim to respond to all enquiries within 2 working hours.
How quickly do you respond to full applications?
We aim to deal with all applications on the day of receipt.
Are you a member of any professional trade body?
Yes, we are a member of the National Association of Commercial Finance Brokers (NACFB) the trade that promotes "best practice" and "self regulation" in the commercial finance industry.
Many products are priced in Libor - What is Libor?
Libor - London Inter Bank Offered Rate is the rate at which banks notionally buy and sell money to each other. It varies from day to day and is closely linked to bank base rate. If Libor is above bank base rate, it indicates rates are expected to rise, if below, rates are expected to fall. The key Libor rate is 3 month Libor, but there is also a 1 month, 6 month and 12 month Libor. Over a period of rising and falling rates, 3 month Libor has been shown to be very slightly more expensive than bank base rate.
What is the application process?
Once we have received an enquiry, we will quickly look to send out likely terms. Once these are accepted, we forward the required application forms to you by e mail or post. Upon receipt of the completed forms, we aim to check, compile a report to the lender, and submit the application to the lender the same day for a decision in principle (DIP).
Once a positive DIP is received, the valuation is instructed. We will then ensure the offer is quickly provided and deal with any completion matters with the lender and solicitors.
Buy to Let mortgage borrowing guidelines
How much can I borrow?
In most cases you will need to put down a 10% - 20% deposit depending on the mortgage lender.
Are Buy to Let mortgages calculated on my salary?
In most cases no, although salary related Buy to Let mortgage products are starting to emerge in the market.
So how are Buy to Let mortgages calculated?
Buy to Let mortgages are calculated on whats called the rental cover calculation.
This means monthly rental income needs to cover the monthly interest only mortgage payment by a certain percentage. This percentage varies between mortgage lenders but normally monthly rent needs to be between 0% and 30% higher.
For example if the interest only monthly mortgage payment was £500, and the rent to interest cover was set at 125%, then the monthly rental required would be £625.
If the monthly rental income does not meet this required figure then the mortgage lending would normally be lowered.
Who will assess the potential monthly rental figure and the property value?
Normally an independent valuer appointed by the lender.
Do most people borrow on an interest only basis?
Yes. Mainly investors want their capital to stretch further and to maximise capital for further purchases. They also want to maximise the tax relief on interest.
Does it matter what type of tenant is in the property?
Yes, only certain mortgage lenders will lend to certain tenant types. DSS and asylum seekers are more difficult.
Does it matter what type of property?
Yes, certain mortgage lenders will only fund certain property types. It therefore makes sense to check the product details or to call to check.
What about if you are borrowing as a limited company?
Many people set up limited companies to invest in property for tax reasons. Investors should be aware that limited company borrowing is restricted as there are fewer lenders in the market, and consequently will tend to be slightly more expensive. Directors guarantees will also normally be required.
Is a problem if I do not have a clear credit history?
Buy to Let mortgages are available for individuals with adverse credit histories, but investors should be aware these will be more expensive.
Commercial Owner Occupier Mortgage borrowing guidelines
What are commercial owner occupier mortgages?
Commercial owner occupier or business mortgages are used by individuals or companies wishing to purchase a property as their business premises.
How much can I borrow and for how long?
The normal maximum is between 70-80% although 85% is possible, and up to 100% can be obtained with additional security. The maximum borrowing period will be 30 years, although the majority of lenders will lend over 20-25 years.
How are Commercial owner occupier mortgages calculated?
Commercial owner occupied mortgages are calculated on the affordability shown in the accounts. There is no set guideline on this. Normally 3 years profitable accounts are required for the best rates, but some lenders will lend with no accounts on a self cert basis.
What sort of interest rate will I pay on a commercial mortgage?
Unlike residential mortgages, commercial mortgages are individually priced based on the strength of the proposition being placed with the mortgage lender. Factors in pricing will be the size of the loan, loan to value and strength of the accounts.
Commercial owner occupier mortgages are all individually priced above Bank of England Base Rate or LIBOR (London Interbank Offer Rate). The mortgage rate paid will be generally be from 1% + base/Libor to 5% + base/Libor.
If the business is a new start up or has no audited / incomplete accounts the mortgage rate will be much higher than a business with a long track record and proven profitability.
Do I need to move my day-to-day business banking?
No - only very rarely. In many cases it is a good idea to keep the two separate. If the borrower keeps the banking and borrowing together, the bank has complete control over the banking and financing. This can lead to difficulties if the bank suddenly decides they no longer want the lending.
Are all property types as easy to fund as one and other?
No, certain property types are deemed by mortgage lenders to present a higher level of risk and are therefore more expensively priced, these will include property types such as petrol stations, golf courses and nightclubs.
What about if you are borrowing as a limited company?
Many people set up limited companies to invest in property for tax reasons. This should not affect the terms. Directors guarantees may be required.
Is a problem if I do not have a clear credit history?
Commercial mortgages are available for individuals with adverse credit histories, but borrowers should be aware these will be more expensively priced.
Commercial Investment Mortgage borrowing guidelines
What are commercial investment mortgages?
Commercial investment mortgages are designed for commercial property landlords purchasing commercial property as an investment, with a view to making money from rental from a tenant and from ongoing increases in commercial property values.
How much can I borrow and for how long?
The normal maximum is between 70-80% although 85% is possible, and up to 100% can be obtained with additional security. The maximum borrowing period will be 30 years, although the majority of lenders will lend over 20-25 years.
How are Commercial mortgages calculated?
Commercial investment mortgages are calculated on the rental income received. Mortgages are calculated on whats called the rental cover calculation.
This means monthly rental income needs to be cover the monthly interest only mortgage payment by a certain percentage. This percentage varies between mortgage lenders but normally monthly rent needs to be between 15% and 30% higher.
What sort of interest rate will I pay on a commercial mortgage?
Unlike residential mortgages, commercial investment mortgages are individually priced based on the strength of the proposition being placed with the mortgage lender. Factors in pricing will be the size of the loan, loan to value and strength of the tenants.
Commercial investment mortgage rates are predominantly determined by the strength of the tenant. For example a Blue Chip company who have signed a twenty year lease are going to attract a far more preferential rate, than a new business start up on a short lease as the tenant.
Commercial investment mortgages are all individually priced above Bank of England Base Rate or LIBOR (London Interbank Offer Rate). The mortgage rate paid will be generally be from 0.75% + base/Libor to 5% + base/Libor.
Are all property types as easy to fund as one and other?
No, certain property types are deemed by mortgage lenders to present a higher level of risk and are therefore more expensively priced, these will include property types such as petrol stations, golf courses and nightclubs.
What about if you are borrowing as a limited company?
Many people do set up limited companies to invest in property for tax reasons. This should not affect the terms. Directors guarantees may be required.
Is a problem if I do not have a clear credit history?
Commercial investment mortgages are available for individuals with adverse credit histories, but borrowers should be aware these will be more expensively priced.
Bridging Loan Finance guidelines
What is Bridging Loan Finance?
A bridging loan provides fast access to funds for residential and commercial property with minimum fuss. They are expensive but quick - normally completing in 7-10 working days.
How much can I borrow and for how long?
The normal maximum is between 70-80% although 85% is possible, and up to 100% can be obtained with additional security. The maximum borrowing period will normally be 12 months initially.
How are Bridging Loans calculated?
Bridging loans are calculated on the valuation only. Lenders often use the 90 day forced sale valuation rather than market value which is normally based on 180 days. This often results in a lower valuation.
What sort of interest rate will I pay on a bridging loan?
Unlike residential mortgages, bridging loans are individually priced based on the strength of the proposition being placed with the lender. Factors in pricing will be the size of the loan, type of property and loan to value. Interest rates are often a monthly flat charge from 0.75% per month to 1.5% per month.
Are all property types as easy to fund as one and other?
No. The type of property will determine the loan to value and interest rate. Difficult to fund properties include golf clubs, nightclubs, and petrol stations.
What about if you are borrowing as a limited company?
Many people do set up limited companies to invest in property for tax reasons. This should not affect the terms. Directors guarantees may be required.
Is a problem if I do not have a clear credit history?
Bridging loans are available for individuals with adverse credit histories, but borrowers should be aware these may be more expensively priced.
