Commercial Property Equity LoanEquity loans for commercial real estate
Yearly returns have risen in recent years and, as we all know, property valuations, especially in the South East of England, have seen tremendous increases in equity securities. Both of these have enabled customers to raising funds against their houses to deposit new real estate. If they remortgage their houses, most of my customers have a tendency to opt for a five-year interest fix, so they are shielded from any interest increases in the near-term.
REMORGAGING buy to let property is also an optional. Several of my customers, especially in the Southeast, have found that although their real estate has a large net present value, the rental they get is too low to fund. The interest rates that will be quoted to you for the extra loan differ from your principal loan in a typical way.
This loan can be a way to obtain relatively quick funding, but the creditor will demand that the property be re-valued to make sure there is enough equity. A further way to obtain funds without modifying your current BTL mortgages or increasing your spending per month is to make a purchase to issue an equity loan with no repayment per month.
Several of my customers have used an equity releasing plan from Castle Trust. In essence, it is a loan that will help lessors optimize their purchase to grant loans to 85% LTV. What matters is that there are no montly payments - no capital and no interest. Instead, the initial loan amount is paid back together with a portion of the appreciation of the property during the term of the loan.
They were excited about the franchise because it allowed them to buy their favourite store without having to raise their spending. Maturities of the equity loan can range from one to five years and there are no interest repayments per month over the life of the loan. Instead, the loan is paid back at the end of the period, usually through the sale of the property, and the interest rate is tied to the appreciation of the property.
One customer who took out one of these mortgages remarked: "I will sell my property in the near term and the equity in my property is significant and more than sufficient to pay back the investor". Should any of these funding opportunities be of interest to you, please contact 01732 471644 to discuss the detail for your particular circumstance.