At present, commercial mortgages are the ideal way to finance the development of businesses, as they provide flexible and affordable financing solutions. For businesses confronted with severe financial difficulties, commercial mortgages are the best way to avoid bankruptcy and to re-achieve stability in the market; for growing businesses, commercial mortgages are perfect for financing business changes and improvements. Commercial mortgages can be used for a variety of purposes, such as: the purchase of business premises expansion, residential and commercial investment, property development, meeting the lenders’ criteria, etc.

Commercial mortgages basically refer to loans made using real estate properties as guarantee for repayment. Although commercial mortgages have similarities with residential mortgages, in the case of commercial loans the collateral (the security pledged for the repayment of the loan) is a type of commercial building or a business real estate, not a type of residential property. Consequently, commercial mortgage deals are generally closed by businesses, not individuals, and unlike in the case of residential mortgages, borrowers have to present with solid credibility and creditworthiness in order to receive a substantial loan.

The terms and conditions of commercial mortgages greatly vary from a regional perspective; for instance, commercial mortgage policies in the United States differ from those closed in the UK in aspects such as the length of the loan, the length of time allowed until balloon payment (total payoff of the loan) and so on. However, the most pronounced variations of commercial mortgages are in areas such as interest rates, which are established by the local market.

In order to get the most out of a commercial mortgage, it is crucial to pay the right attention to interest rates, the duration of the loan and the repayment schedule stipulated in the contract (these are interrelated variables that can substantially influence the quality and the efficiency of any underwritten commercial mortgage). It is important to note that there is no right or wrong way to negotiate the conditions of a commercial mortgage; however, it is crucial to opt for the repayment plan that best suits your business’ needs and your financial possibilities.

Commercial mortgage interest rates can be categorized in two distinctive groups, each having specific advantages and disadvantages: commercial fixed rates and commercial variable interest rates. Commercial fixed interest rates are ideal on the premises of continuously rising interest rates on the market; they are preferred by business owners who want to stabilize the monthly payment amount. By choosing a commercial fixed rate, one can also incur an “early redemption charge” (ERC), which basically acts like this: after the previously established fixed rate period of repayment has expired, the borrower benefits from an extended period of repayment, with the condition to pay a variable rate established by the lender from that point on. The ERC has been adopted by many categories of commercial loan providers, thus allowing borrowers to overcome any emerging financial problems during the period of repayment.

The commercial variable interest rate is primarily influenced by the changes in the base rate established by the Bank of England. This type of commercial interest rate also fluctuates according to the local market rates and other factors, and should be avoided in highly unstable markets. Before choosing commercial variable interest rates for your loan, it is crucial to do an extensive research of the market in order to efficiently forecast the short-term and long-term evolution of the market interest rates. If the market prediction is favorable and the interest rates are expected to drop significantly, then the variable interest rate is the indicated choice; otherwise, one should opt for the fixed interest rate.

The process of closing the right commercial mortgage deal has many subtleties and involves performing an entire series of specific tasks. In order to get the most out of a taken commercial mortgage and to overcome any impediments over the period of the loan, it is crucial to employ the services of a prominent, highly reputed commercial mortgage brokerage company.

Commercial mortgage brokerage is an elaborate process that involves the performing of an extensive series of tasks and building a solid broker – client relationship so that all the parties involved can benefit from the collaboration. With the help of an experienced and dedicated commercial mortgage broker, the borrower benefits from professional assistance in structuring the deal, while the lender benefits from better exposure and credibility and has the opportunity to integrate in a prominent, reputed group of lenders. Commercial mortgage brokers play major roles in closing the right deals, so whether you are looking for an appropriate commercial loan or you are interested in lending funds, it is crucial to collaborate with an experienced, reputed and reliable broker in order to be provided with professional assistance.

A highly competitive commercial mortgage broker should have in-depth experience in the field and advanced counseling, administrative, analytical and processing abilities, vital traits in commercial mortgage brokerage. As a borrower, you should look for a commercial mortgage broker who collaborates with a large number of reliable lenders; this way the chances of closing the perfect deal are substantially increased.

Also, it is advisable to employ the services of a mortgage brokerage company that is well-defined in the market, a company powered by numerous specialized teams of professionals, able to efficiently service the borrower’s needs. Considering the fact that the process of closing a commercial mortgage deal involves plenty of work, you should ensure that the commercial mortgage brokerage company of your choice is appropriately staffed to handle all the required paperwork and other important aspects. From the lender’s perspective, the right commercial mortgage broker should have a high position in the market and as many active collaborations with major lenders as possible.

To make sure that you will find a commercial mortgage broker who has the required expertise and the right professional skills, it is advisable to perform an elaborate analysis of the market, relying on various sources: media (you can rapidly find a reliable commercial mortgage brokerage company by browsing specialized websites on the Internet or by reviewing newspaper articles), private sources (you can obtain recommendations from professionals who constantly collaborate with commercial mortgage brokerage companies – real estate lawyers and accountants, for instance) and face-to-face meeting (a great way of finding more things about a certain company is to schedule a meeting with that company’s representatives in order to provide you with answers for your questions regarding credentials, professional achievements and specific policies.

When looking for the best commercial mortgage broker for your business’ needs, it is advisable not to make hasty decisions. You should take your time and carefully investigate the market in order to find the right broker. By performing an in-depth research and analyzing all possibilities, your chances of identifying the best commercial mortgage broker are substantially increased and this way you will be able to get the most out of your next commercial mortgage transaction.

Without any doubt, commercial mortgages in London can rapidly materialize into great investments. Whether they are taken exclusively for business use or for personal needs, London commercial mortgages are the best way to finance profitable investments, ensuring that the properties’ value will grow along with the market.

London has a very powerful economy and continuously expands with so many new businesses and the development of commercial properties; for these reasons, London offers the perfect climate for investment using commercial mortgages. London commercial mortgages offer many advantages to both borrowers and lenders, ensuring that the relationship of collaboration between parties brings substantial mutual benefits. Once you close a commercial mortgage in London, you are guaranteed to make considerable profits by making the right investments. However, take note that London commercial mortgages are renowned for being difficult to obtain, involving an entire series of requirements that must be fulfilled by the borrowers.

At present, obtaining a commercial mortgage in London can be a very difficult task with the current high property prices, tough conditions imposed by lenders and the demanding process of claiming the commercial property of your choice. Before trying to obtain a commercial mortgage in London, it is very important to arm yourself with good motivation, a lot of patience and to carefully plan your actions in the overwhelming, fast-moving local market.

To substantially increase your chances of getting a convenient commercial mortgage in London, it is advisable to employ the services of an experienced, reputed broker. Without the guidance and support of a reliable London commercial mortgage broker, it can be very difficult, if not impossible to receive the right loan at the right time. Whether you are interested in obtaining London commercial mortgages, commercial finance in London or asset finance in London and regardless of the way you are going to use the loan (property development, business development, personal purposes), you need to find the best broker out there in order to fulfill your objective.

An experienced London commercial mortgage broker can provide you with access to reliable, competitive lenders (due to the high values of London properties, most local commercial mortgage lenders usually ask for a larger deposit or some form of asset to protect against potential shortfalls), can boost your financial credibility and your credit worthiness and will guide your steps starting from completing the commercial mortgage application to finalizing and refining the deal. You will also be provided with valuable help on finding great investment opportunities among the multitude of London commercial properties. Whether you are simply looking for advice on London commercial mortgages, commercial properties in London, or have found a property you would like to purchase, you are guaranteed to find the collaboration with an experienced, dedicated broker very beneficial and convenient.

The UK offers a variety of commercial investment possibilities and is the perfect place to close a commercial mortgage deal for property investment, business development, or personal purposes. Getting a commercial mortgage in the UK can be very beneficial for borrowers, as they will be able to quickly find attractive investment opportunities in the well-developed local market. Although the task of obtaining a commercial mortgage in the UK can at first be very problematic without specialized help (preferably a competitive UK commercial mortgage brokerage company), once you get your desired commercial loan you will rapidly realize the multitude of advantages, such as: possibility to retain ownership of your business, as well as business premises; gradual capital gain for your business over the entire period of the commercial mortgage repayment; lower interest rates; no rental instability; tax deductibility; highly efficient cash flow management.

The primary advantage offered by UK commercial mortgages resides in the fact that you will be able to retain ownership of your business and your business premises during repayment. As long as you make efforts to repay the loan on time, the commercial lender who has provided you with funding is not entitled to more than receiving interest on the mortgage. Another very important advantage of UK commercial mortgages consists in the fact that once you close such a deal, your business becomes an asset that can rapidly grow in value under favorable market conditions. By closing a competitive UK commercial mortgage, you will be able to ensure long-term capital growth for your business.

Another major advantage of UK commercial mortgages refers to competitive interest rates. Compared to other types of loans, UK commercial mortgages have much lower interest rates, especially in the case of repayments made over longer periods of time. In addition, borrowers can opt for fixed interest rates in order to know the exact sum of money that must be repaid each month.

Stability is yet another advantage if UK commercial mortgages. Unlike those unstable rental payments (which may increase unexpectedly), commercial mortgages eliminate such increases on the premises of less fluctuant interest rates. The stability characteristic to UK commercial mortgages allows for more efficient business planning.

In addition to the mentioned benefits of closing UK commercial mortgage deals, this category of loans also offers the advantage of tax deductibility. Payments are tax deductible and the net proceeds of the loan don’t represent taxable income. This can considerably reduce the amount of taxes paid by your business every year. Another notable advantage offered by UK commercial mortgages is that they allow for more efficient cash flow management. Considering the fact that the mortgage is received for a number of years, businesses can efficiently predict their profits and expenses, as well as plan their cash flow management in great detail. With the right repayment plan, UK commercial mortgages are some of the most beneficial types of loans designed for businesses.

Negative amortization loans, also known as deferred interest loans, neg am and payment option ARMs (adjustable rate mortgages), are home financing options that have payment adjustment caps in addition to interest rate adjustment caps. This means that even though the loan's interest rate may increase, your payment will generally stay the same. As housing prices skyrocketed, these loans became more popular because they gave homebuyers more power to purchase more house for a lower initial cash outlay. The 1% start rate also makes house payments more affordable for the first few years of the loan.

How Negative Amortization Occurs

A mortgage is largely figured by using the loan amount, the interest rate and the number of years to pay back the loan. Traditional mortgages consist of monthly payments to cover interest and a gradual reduction of the principal (amortization). With negative amortization loans there are payment caps that limit the amount of payment increases, but not interest-rate increases. As a result, the minimum payments do not even cover the monthly interest. The shortfall is automatically added to your loan balance, causing the principal balance to increase rather than decrease.

Neg-Am and Option ARM Risks

If you make the minimum payment, in addition to the unpaid interest being tacked onto the loan balance, additional interest may be charged on the shortfall. So, the deferred interest can take your equity and cause you to owe more than what the house is worth over time.

Comptroller of the Currency John C. Dugan said regulators are especially concerned about negative amortization loans in real estate markets entering down cycles: "If real estate prices decline -- and there already is evidence of softening in some markets -- these borrowers could face the bleak prospect of loan balances that exceed the value of the underlying properties." Dugan and other regulators are also worried that many people may not fully comprehend the impending payment shock when the loan adjusts to fully indexed payment.

The federal financial regulatory agencies express concern over the fact that these low payment home buying options are offered to a wider spectrum of buyers who may may not otherwise qualify for a similar-size mortgage under traditional terms and underwriting standards. And, institutions are increasingly combining these loans with other features that may compound risk ("risk layering") including reduced or no documentation loans, and the 100% 1st mortgage, also known as a no money down home loan or 80-20 loan because of the typical 1st mortgage that covers 80% of the purchase price and simultaneous piggyback 2nd for the 20% balance.

Mary has published many notable mortgage loan articles ranging from She recommends the following mortgage lenders for getting a purchase, refinance or second mortgage. Check out 100% Negative Amortization Loans and for a 2nd quote take a look at home equity loans. It never hurts to get 3 quotes, so for more information, please visit Neg Am Experts.