How to get industrial property mortgage loan or so called owner occupied investment property? Industrial property mortgage is a commercial loan to be used for the purchase or re-mortgage of a standalone warehouse unit, an engineering workshop, or any type of premises used for industrial business functions. Premises for this type of mortgage often fall into two categories: Owner Occupied Commercial Premises and Investment Property. Commercial mortgage lenders attach different conditions to each of these categories so we focus in this post on Owner Occupied Industrial Premises.
Owner Occupied Investment Property
To qualify for Owner occupied investment property mortgages the premises has to be used for an industrial purpose, such as manufacturing, engineering or warehousing. The property could be anything from an old factory converted into an engineering workshop, a purpose built storage facility, or manufacturing facility. It cannot be primarily used as a retail outlet.
Owner occupied investment property – Lending Conditions
This business category is treated by commercial mortgage lenders as slightly higher risk than some others. This is especially true if the business involves the use of hazardous materials. As such, many lenders have reduced LTVs for this business category. Commercial mortgages for industrial owner occupied investment property are available from both High Street and specialist non-status lenders.
Applications are considered for businesses:
Irrespective of their credit history
For mature businesses with strong accounts
Start-up businesses with no accounts
A Commercial Mortgage Broker will help to determine the best lending source for your business based on your unique situation. Options are available for industrial loans or mortgages on leasehold premises, although the length of the lease (years) at the end of the period of the loan, is often a major determining factor in whether a mortgage offer will be forthcoming.
Owner occupied investment property product options:
Industrial Self-Cert Mortgages criteria: to 85% LTV, LIBOR and Bank of England based retail lenders available, Property valuation was mandatory. Not available anymore.
Budgetary Self-Cert Mortgage Rates: around 2% above base with accounts, true self-cert more like 4% over base with reasonable credit history, and 6% over base if you have CCJs or a satisfied Bankruptcy on your credit file.
Note For Discharged Bankruptcies
If you have a satisfied Bankruptcy stamp on your credit file we strongly recommend that you request a Certificate of Satisfaction before you apply for a new retail mortgage. The process is very easy. Simply apply to the Court who issued the Bankruptcy and pay the small charge. The process takes 4 weeks to complete, but most lenders wont lend you money without seeing this document!
Status-Based Industrial Mortgages: The High Street lending criteria can be quite rigid, although there is some level of flexibility for larger purchases (chains etc), or where the applicant has a strong track record in an industrial business.
Typical maximum 80% LTV
Extended LTVs available (conditions apply)
Require Valuations (property and business)
Additional security may be required
Business Plans and accounts will be required
Owner occupied investment property – additional options exist to build structured finance for refurbishment projects, or special situations.
Budgetary High Street Mortgage Rates: rates amongst the Banks vary mortgages and re-mortgages, but start at around 1%-1.5% over Bank of England Base Rate, and scale up to around 6% over Base depending on the perceived risk of the venture.