Everything You Need to Know About Commercial Mortgage

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Everything You Need to Know About Commercial
Mortgage
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What Is A Commercial Mortgage?

• Commercial mortgages are used to buy buildings
  and lands for business purposes.
• The primary principle of commercial mortgage is
  to acquire a place to do business and guide the
  loan wealth in buying such a property..

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Need of a Commercial Mortgage

• If you are planning to establish a new business
  and you are in need to buy a land for the purpose
  then Commercial Mortgage could be one of the best
  options.

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Commercial mortgage can also give you money to

• 1. Buy an existing business
• 2. Buy your business place
• 3. Invest in commercial or residential property
• 4. Release equity held in commercial property

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Advantages of Commercial Mortgage

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• One of the major advantages of Commercial
  Mortgage is that you can keep ownership of your
  business and your business premises.
• Making a substantial capital gain would be an
  easier task for you. This can be a great way of
  realizing capital growth over a long period of
  time.

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• It gives you a more stable business planning
  environment as these mortgages are not subject to
  rental fluctuations.
• They offer lower monthly costs because they
  charge typically lower interest rates than other
  unsecured loans.
• Commercial mortgage interest payments are tax
  deductible. This contributes to reducing your
  business annual tax overheads.

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Disadvantages of Commercial Mortgage

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• The deposit you need could be substantial. Not
  only can a hefty deposit be difficult to raise,
  this is cash that may be better used in other
  parts of your organisation.
• All maintenance, security and the general upkeep
  of your premises would need to be paid for and
  undertaken by you, there will be no going back to
  the landlord to complain that the pipes have
  burst again, those pipes are now your
  responsibility.

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• There are always fluctuations in property prices
  and sometimes these short term downturns can
  affect the value of your property which can
  result in reduced capital, affecting your
  finances and future borrowing capability.
• If you happen to have a variable rate mortgage
  then any rise in interest rates will result in
  your monthly repayments becoming more expensive.