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  • Philip Bacon

When is the best time to look for a commercial mortgage?

Updated: Oct 16, 2023

Looking for a commercial mortgage can be a daunting task, with so many offers available, getting the right deal can often leave doubts about whether the right mortgage has been chosen. Especially at the moment with the economy and cost of living crisis.

Not to mention that there are various different offers based on your credit score and other factors based on your requirements. This alone can make it challenging to secure the right mortgage in the first place! For different businesses, there will be different loan values.

Do certain times of the month impact your success in getting a mortgage?

The time of the month should not affect being able to secure a commercial mortgage. Unlike residential all mortgages are looked at on a case-by-case basis and lenders are under a lot less pressure to make quota to secure the numbers for the month.

This again works through the monthly cycle, no time of year is better to remortgage a commercial property with it being down to individual circumstances.

When should you apply for a mortgage?

To make the financing process smoother and more successful, it is highly advisable to initiate the mortgage application before your current term expires. Here are several compelling reasons to begin the mortgage process early:

  • Determine Your Budget: Prior to seriously considering releasing equity, it's crucial to ascertain how much you can afford. This is especially vital for companies and individuals with complex financial situations. Failing to do so might result in losing out on a desired level of funding due to your borrowing capacity. To help you work out your budget, read on for more information.

  • Gain a Competitive Edge: Having your finances in order compared to other borrowers. This allows you to take advantage of limited edition competitive rates when they are on offer, as well as making you a more attractive and reliable candidate.

  • Consider Joint Ownership: If you plan on purchasing the property jointly with a business partner, it can impact the type of mortgage available to you and the amount you can borrow. Addressing these matters beforehand will help streamline the property-buying process.

  • Avoid Delays and Issues: Commencing the mortgage process early on can help prevent unexpected delays and complications later on. Minimising surprises in the property financing journey is key to ensuring a smooth experience.

What to do before applying for a mortgage?

To increase the likelihood of a successful mortgage application and a smooth property purchase, there are essential tasks to complete in the months leading up to your mortgage application.

  • Ensure Mortgage Readiness: In the months preceding your mortgage application, it's crucial to put your finances in order. Check and improve your credit rating, as a positive credit score significantly impacts your chances of getting approved. For tips on boosting your credit score for a mortgage, refer to our guide "11 Tips to Improve Your Credit Score for a Mortgage."

  • Determine Your Budget: Knowing your financial capacity allows you to determine the appropriate deposit amount, with around 25% typically required for a mortgage BUT it does depend on your requirements when it comes to your business. A larger deposit provides access to more deals and often better interest rates.

  • Consider Mortgage Types: Think about the type of mortgage that suits you best. Do you prefer a fixed deal for predictable repayments, or a tracker deal in the hope of overall cost savings? While you don't need to decide immediately, exploring your options in advance allows for a quicker decision when it's time to choose a mortgage. A commercial finance broker can guide you through the pros and cons of each type, aiding you in making an informed choice.

  • Gather Required Documents: Prior to applying for a mortgage, gather the necessary documents to avoid delays in the process. These documents typically include proof of earnings, bank statements, proof of identification, current assets and a business plan.

By completing these steps proactively, you'll be well-prepared and in a strong position to apply for a commercial mortgage.

If you need to shop around, use Knights Row.

We have exclusive access to a wide network of lenders, so we can find the right deal for you. Some lenders will try to sell you a deal that works for them but here at Knights Row we position ourselves so that only you get the best deal. Contact us today to find out more.



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