Many people get confused between Commercial Mortgages and Development Finance. They are both loans for Commercial Property but they are for different purposes. If you have a property that you want to purchase and develop you will often need more than just the purchase price. You will also need funds for the Development. That is when you need Development Finance. If you just want to purchase a property but do not need funds to begin occupation then you simply need a Commercial Mortgage which will be a percentage of the purchase price. Development Finance is short term and it will need to be replaced by a longer term Commercial Mortgage once the property development is finished and the property is up and running.

Clearly Commercial loans and Development loans can cover the same ground and increasingly there is a tendency for that to happen. Although Commercial Loans are harder to get in the current economic crisis Developments loans do have funding. More and more lenders are coming into the market with products for Development Loans.

The type of project covered by Development funding is a property which needs to be refurbished for a new use or land where you want to build. Often the loan is structured in as a loan on the property which will be for say 70% or so of the purchase price and used to buy the land and then funds to do the Development.

The Development loan is known as Mezzanine Finance. It is short term funding for the work that needs to be done to finish the job. It will often cover more than the purchase price although you will normally have to put in funds as well. You can get 100% finance but if you do not have a track record with the lender in such projects may be required to take on someone the Lender knows as a Partner to work with you and who will negotiate a profit share.

The person who develops a property will be quite clear what they want to achieve. The problem is getting the right finance from a Lender who can understand and support that vision. That is why it can be so difficult to find the right Lender and why probably using a Broker experienced in the market is essential.

The right Lender i.e. one who is likely to lend to such a project will be one who understands and wants to support such projects. But they will make their decision based on an expert appraisal in detail of the particular project presented to them. That means a strong case covering all aspects of the Development and the Developer has to be prepared and presented if you are to get the loan.

Those who are prepared to finance Developments have a wide range of loans to choose from because in the current economic crisis many Lenders will not lend to such projects no matter what the terms. One key factor will be the proven track record of the team doing the Development to deliver. Novice Developers will have a very hard time getting finance.

However without your own cash reserves your only option for proceeding is Development Finance because a Commercial Mortgage will not be granted and will not provide the funds you need. If necessary you may have to give extra security.

Unlike a normal mortgage the charges and interest for each loan will be individually structured based on all the factors related to the project. What you can be sure is they will be much more than a typical Commercial Mortgage because they are short term and assume that the Development will create a great deal of extra value so enabling them to be paid. If the Development does not meet those criteria it is probably not worth proceeding with.

You must also be prepared for the Lender to play an ongoing role in the project. They know how risky such projects can be and the problems that can occur so they will want to monitor progress to ensure all goes to plan. But you should welcome their involvement because their expertise may be of great assistance to you.

It’s easy to miss the hidden value of a potential investment, as is the case with Hull which still struggles to shed its image of a cold, dreary, deprived northern town. The fact is that has not been the case since the turn of the century, Hull has been undergoing a 2 billion facelift which is scheduled to be completed in 2015, 15 years after it began. Hull is once again an attractive opportunity for businesses and entrepreneurs alike.

Kingston Upon Hull (as it is officially known), population is 265,000 or so people in the county of East Riding of Yorkshire, Which is situated in the North East of England. Hull maintains a strong civic identity, with a long maritime history that continues today, to its benefit none of this has been diluted in the current regeneration of the city.

What has shaped Hull’s modern reputation as a dull town is the amount of horrid 1960’s architecture that sprung up, as Hull was heavily targeted by the Luftwaffe during the Blitz. The architecture was never the best nor the buildings themselves, which led to large parts of Hull being rundown. Currently, Hull as some of the highest unemployment figures in the UK at 8.1% of the population (Oct 2011).

Nevertheless, there were signals the various regeneration schemes were finally bringing down what were always above average levels of unemployment. Unfortunately for Hull, the Credit Crunch hit, with the emphasis on crunch when it comes to Hull.

What SMEs, property owners and entrepreneurs need to keep an eye are the many developments still to come in Hull. With the average house price in Hull being 99,500 and rising in value to the tune of 3.2% yearly, there is money to be made. Contrast those figures with the national average; 228,000 average house price which is currently depreciating 3% annually, Hull continues to show signs of being on the up. Taking a closer look at house prices, a detached house averages 179,000, semi-detached 111,000 and a flat at 77,000 approximately. (All figures are correct up to August 2011 and are from the BBC)

The next great development in Hull is simply know as The Boom, it will consist of six hundred ‘luxury flats’ retail units and boutiques, cafes and restaurants and a 120 bedroom hotel. It sill be sited on the River Humber’s East Bank and total coast is estimated at 100 million.

The first part of this development is also complete, which was to build an eye catching foot bridge that connects The Boom site to Hull’s city centre, after far too many delays, this bridge will now be opened in November 2011, connecting the 7 acres of The Boom site which will consist of nine modern apartment blocks.

The Boom is part of an overall master plan, some of this plan has already been completed, take the St Stephens Project as an example. 560,000 square footage of retail space, a shopping centre that cost 200 million and was completed in 2007. Along with the centralised transport infrastructure next door, the train station was refurbished and a coach and bus station was added to increase public transport access for Hull and its surrounding urban areas, a plan which has been a huge success.

The Humber Quays Development is half way through completion at present, the first part has been complete which consists of two office blocks, an official World Trade Centre building, a major coup for Hull’s economy, and an additional fifty one apartments. When part II gets under way, Humber Quays will have added a four star hotel of 200 bedrooms, a restaurant and more office developments with the World Trade Centre as the anchor.

Of course, as the credit crunch hit, it has led to inevitable delays as the finance for the latest parts of the regeneration dried up, a familiar story all over the country, most notably in Chester also. On top of this, Hull Forward, the Quango given responsibility to drive this project forward lost government funding in June 2010. These sound like major obstacles, but the projects continue to move forward and none have been cancelled. The endless round of delays soon seem to be coming to an end, so for investors and entrepreneurs, it is high time to ignore the general view of Hull and take a closer look at the opportunities that are arising in this newly revitalised city.

In this article we look at the Bank of China, and we will be issuing a whole range of additional articles on the subject of banks and building societies across Britain who is operating within the UK mortgage markets today.

You probably won’t be shocked to hear that the Bank of China isn’t actually a small lender and they are actually the 3rd biggest bank in the world. They are simply being written about in this category as they only play a small part in UK mortgage markets, and only entered the markets two years ago.

When they did enter the market in Britain, the bank were very choosy and had strict criteria when lending for mortgage purposes in order to keep tight control of the amount of lending and keep a good balance on service. They used only four brokers in the entire country, making them extremely cautious indeed.

Chinese restaurants and takeaways make up a high percentage of the Bank of China’s UK division customers as you may have imagined, and this information was recently detailed on their site. In spite of this, they did also confirm that they are open to commercial mortgage lending for other businesses in addition.

Loan to value is around the same, if not a little more cautious, than most other lenders in England. The LTV from the Bank of China usually sits at around the 70% LTV for loans up to 150k. Anything above that but below half a million is usually offered with a LTV of 65%.

Fifteen years is the mortgage term that the Bank of China seem to like. Most of their contracts are on a fifteen year repayment term and they only offer commercial mortgages on a repayment basis.

Commercial mortgage seekers that apply to the Bank of China for their loan have to visit one of the four brokers in the UK in order to have their application processed as part of the lender’s standard procedure.

There aren’t really any set interest rates for commercial mortgages per se, because the lender prefers to assess each case individually and offer on whatever rate they believe to be right for that case. This is similar to certain other commercial lenders.

The only comment that we can make is that there are not really any lenders offering rates of lower than base plus 3.5%, which would make it up to 4%. The Bank of England set the base rate at half a percent back in 2009 after the financial crisis swept the country. Fixed rates are not on offer so all customers are on tracker rates.

Please take note that the any figures quoted within this article were researched and were accurate at the time the article was created, and that these figures may change with time.

Many people believe that you have to move house in order to benefit from a better mortgage deal but this isn’t true. You are able to remortgage your home at any time, but choosing the right time is vital in order to save the optimum amount of money by getting a better interest rate.

Initially, you should speak to your current mortgage lender in order to find out whether they are offering any remortgage deals on better rates that the one you’re currently on. This will also give you a place to start in comparing deals from various mortgage lenders in the marketplace.

The only problem is that there are hundreds if not thousands of mortgage deals available and they change daily. This means you’ll need to do your homework. You may also be able to get a better deal because your financial situation may have improved since you took the original mortgage.

If you’re still stuck after reading about various mortgage types, consider employing a mortgage adviser who will be able to assist you with choosing the right remortgage deal as well as giving you assistance with the application forms and the required documents.

With every deal that you find that you think may suit your needs, ensure that you fully read through the mortgage details to ascertain exactly what the deal consists of. If you’re uncertain and need more help, then just contact a mortgage adviser. They can be cheaper than you think!

When you are considering each of the deals that you like, make sure that you understand the interest type that the remortgage contract is on. Is the interest rate fixed at a certain amount for a specified period of time? Or will the interest rate change? Knowing this is important.

Another thing to look out for is the amount that your monthly repayments will be. Do you know whether the repayments will fluctuate or remain level for a certain term? If not, check. If you don’t have an adviser you should be able to ask the lender who is offering the deal.

Another important feature is payment holidays. We all have the odd month where we struggle a little financially, so it’s worth knowing whether or not you can take a repayment break to get your finances back in order.

One of the most important things to check is whether your existing mortgage contract carries an early repayment penalty - this is generally applied if you are still within an introductory period of a contract (i.e. 2 years into a 3 year fixed rate contract).

So, in summary you need to check the details of the new and old contracts fully to ensure that you understand what you’re entering into, and if you’re not certain about anything you should use a professional mortgage expert to help you understand.

Is it the right option to take out a Commercial Mortgage? All personal circumstances differ, but in general terms’ taking on a commercial mortgage has many advantages for a business. Most obviously, you would own your own premises, not having to rely on rental contracts and at the same time own a valuable asset which would most likely increase in value over time. If or when you finally decide to sell your office, factory or warehouse you could profit from a capital gain at the sale.

Not having to rely on rental contracts that only last for a year to a few years in most cases means it’s easier to predict and calculate long term business costs, as with a commercial mortgage, the payments will remain relatively stable. There will be no large increases in rent to contend with, a commercial mortgage will give you a monthly repayment plan at a set rate, meaning it could be cheaper overall than renting a premise.

Other business opportunities are opened also, such as the ability to be landlord yourself and sublet a portion of your premises, creating a new revenue stream for the business. If the property is too big for just your company, subletting to numerous companies can go a long way to covering any commercial mortgage payments you have.

What Are The Advantages Of A Commercial Mortgage? Tax deductibility on commercial mortgage repayments is the best place to start. On many, though not every, commercial mortgage tax can be reclaimed as a tax expense and be deducted when your gross profits are calculated at the end of the year.

Another of the indirect goodies a commercial mortgage delivers is the option to avoid having to sell a stake in your company for capital injection. Using the equity in your commercial mortgage is a self generating way to get the cash you need to expand or pay debt off without chipping away at the control of your company.

We’ll stress this again as it’s a strong point, but having a commercial mortgage is the rock to underpin your company. You won’t have to deal with rent increase every few years that don’t help with profit and overheads, giving you a stable figure to work with over many years instead.

Who will Responsibility lie with in the Company for the Commercial Mortgage? This question all depends on the chain of command within your company, though it will always be with whoever is at the top of the pyramid. Partners in a business will be jointly responsible for any commercial mortgage, while a sole trader will have all the burden to deal with.

In a company structure with several directors, they will all be liable for the commercial mortgage and its repayments. Each will have to submit a personal director’s guarantee, which are necessities with most lenders, in which the directors will assure the lender they will take responsibility for the commercial loan.

What Amount Can I Borrow and Over What Term? The time period for commercial mortgages has a ceiling of 20 years, reduced to 15 years for older premises. Interest only commercial mortgages are available, but most will convert to capital mortgages after a certain number of years, so discuss all potential options with lenders.

You’ll have more success acquiring a commercial mortgage the LTV (Loan to Value) rate is, the higher the deposit, the lower interest will be and approval is more likely. Deposits for commercial mortgages tend to be higher than for residential mortgages, minimum deposit will be 20% with the average reaching no higher than 30%. But like I already stated, the more you can deposit up front, the better for you and your business in the long term.

Buying or renting your commercial premises can be a tough decision, especially if you are a relatively small business. But what is the right choice for you?

If you need to move quickly or require flexibility in your premises to contract and expand then renting may be your best option. Businesses that see fluctuation in demand may require the ability to grow and shrink in size and so renting would be a good option. Buying a commercial property may well be suited to a business that is looking for a level of stability and to benefit from an increase in value of the asset.

Buying commercial property: Buying a commercial property means that you can immediately benefit from an increase in the value of your property asset. Ownership of an office building or warehouse can add significant value to your company assets as the value of your property increases over time. You may also find that buying a commercial property makes you money on a monthly basis; often you will find that your commercial mortgage repayments are lower than the equivalent rental payments.

Renting rather than buying can also eliminate the issue of last minute maintenance costs. As a tenant, the landlord generally pays for maintenance costs, anything that needs fixing, redecorating for wear and tear and the costs of securing the building as well as buildings insurance, so you will have more money to build your company. Also you won’t suffer so much if the market crashes like it did in recent times, but you should keep in mind that rent can still increase if the economy suffers.

It may also be the case that you are able to buy a property that is larger than you need allowing you to sublet the additional space. This would allow you to generate important rental income that could contribute towards your commercial mortgage.

Buying Commercial Property and Commercial Mortgages: Buying a commercial property has the advantage that every mortgage payment means that the company owns more and more of the property, rather than it being dead money if you are renting. Property is an excellent investment as the value increases, this increasing the business asset value. Mortgage payment can often be lower than rental costs too if you can get a good interest rate.

Mortgage payments made for commercial property by a business are also allowed as an expense for tax purposes so you can actually get some money back and/or pay less tax, which of course is always a plus. For company directors, you can often also buy a property through certain pension plans, although it would be best to speak to a financial adviser before making such a decision as the process can be complicated and carries certain risks.

Renting provides a more flexible option should your business need to move, expand or contract. Businesses that suddenly need to expand or contract can find it easier to do so if their premises are rented than if owned. In summary relocating is much easier to manage if you rent premises than own them.

The only downside is that commercial mortgages often require a large deposit, but if the capital is there that won’t be a problem. Depending on your company’s situation and the building being purchased, the deposit can be up to 50% of the property value. You’ll also need to be quite sure that you will be happy where you are as the costs of relocating will be very high compared with those of moving from one rented property to another.

Deciding to rent your business premises or to buy with a commercial mortgage will depend very much on the specific needs of your business. Taking into account the above points will help you come to the right decision for your business.

In recent times it has been difficult to find investments that have offered decent levels of growth. The financial markets have been in turmoil since the financial meltdown that swept the globe within months and many people have watched their property values plummet with little warning.

However there are some investments that stood strong throughout the recession, and were barely affected by the financial trouble that most other markets saw. Wine is one of these. It has been reported that wine has done extremely well for almost 15 years, offering great rewards to investors.

The cost of wine has increased by almost 500% in just 14 years according to a national newspaper report early in 2011, showing just how astounding the returns have been on investments when compared with an average increase of just 70% in another large popular stock market.

The reason for the increase is that eastern countries have been in demand of quality wines, and as we know high demand means high prices can be charged. But this has also meant that it is now expensive to enter into a wine investment in the first place.

Of course, many people simply don’t have the funds available to inject large sums into the stock markets regardless of the rewards that can be made from it. That’s why some people opt for a remortgage to borrow additional funds, giving them the cash to invest in a hopefully worthwhile investment.

How much extra money you can borrow will really depend on how much equity you’ve got locked away in your property, and how much the lender is willing to lend based on your credit history. Equity is how much of the property is not mortgaged. For example, you may have 30% equity if you have a 100,000 home with a 70,000 mortgage on it. So you could borrow a proportion of the 30,000.

The whole idea of borrowing money to invest means that you will need to be making higher returns on your investment than the interest that your lender is charging on the loan. So if your mortgage interest rate is 5% per annum, you’ll want to be making more than this on your investment to make profit.

If your investment is not making enough growth to at least match your mortgage interest then you are essentially losing money and thus the investment is pointless, but this should not be too difficult when you consider the low interest rates currently available on mortgages.

If you don’t know much about the stock market or investing, then it is advisable to seek advice from a professional independent financial adviser who will be able to point you in the right direction to reduce the risk of falling flat on your face.

Remember, if you use a further advance to invest in wine, you are actually making two investments as hopefully your property value will increase over time too so it’s a double whammy!

If a holiday abroad tickles your fancy, you might be interested to learn that the prices have increased dramatically in the last few years. It has been reported that this is due to the rise in fuel prices and so airlines are having to pay more, and of course this is passed on to the customer.

Various holiday companies conducted research two years ago which indicated that the average price of a holiday abroad had increased to almost 3,000 when including the costs of all spending. So many people are now looking to remortgage to pay such high costs and we’ve put together five reasons why this is a good idea.

1. Just one monthly payment to your lender: With a remortgage, you are basically redeeming your old music and replacing it with a new one from another lender. At the same time, you may also be able to borrow additional funds which could help you to get the holiday you have been dreaming of. You’ll have just a single monthly repayment to your lender, which wouldn’t be the case if you opted for a personal loan instead.

2. It’s so simple! Remortgages are very simple to arrange and you are spoilt for choice with a range of different contracts for choose from including various repayment methods and interest rates.

You don’t even have to deal with the paperwork (other than the application unless you employ a mortgage broker), as the lender deals with the paperwork for you.

3. Wider acceptance with remortgages: Remortgages are often more likely to be accepted than other credit such as unsecured loans and credit cards, especially if you are a freelancer or contractor and don’t have any guaranteed income or if you had bad credit.

Some lenders deal with the additional risk by charging higher interest on the mortgage loan, however as there is a property acting as security for the loan, it is possible to be able to borrow additional funds even with poor credit history so that you can go on your perfect trip.

4. Remortgage cost less: Because remortgages use your property as security for the loan, they are lower risk and so lenders are more open to offering lower interest rates than on unsecured lending such as credit cards.

Because of this lower risk category that remortgages are in, lenders are able to offer lower interest rates which in turn lowers your monthly mortgage repayments to the lender.

5. Repayments can be spread over longer: Mortgages and remortgages can very often be repaid over long periods of time, which again can help to reduce the monthly repayment and thus can allow you to be able to afford that dream holiday!

Many people these days cannot move home due to drops in their property value meaning that they are in negative equity or would lose out on substantial growth and so they are now opting to remortgage instead to improve their homes by taking on projects such as new bathrooms.

Projects like this can add value to your property which is why so many people have opted to do it, and a remortgage is a way that many are choosing to finance such projects. By doing home improvements, you could potentially add thousands to your property’s value.

Another project which could add thousands to a property value but many people forget about is the garden. If you were to make the garden more interesting this could increase the value of the property as well as increasing the amount of interest in it when you’re trying to sell.

There are many things that you can do to improve the garden and they don’t have to break the bank. Simple projects like adding a paved area for eating outdoors can cost very little but can make a real difference to the look and feel of your garden.

You can also take on other cost effective projects such as adding garden plants or digging up the old tired lawn and having a new one laid down. Small things like this can make more a difference than you would think as they make the garden look much tidier.

If your garden is on the larger side, you could invest in a larger project such as adding a wooden covered seating area which can give additional dining space. If you have the money, adding heating a lighting to such structures could add even more value as it would be more attractive to buyers.

For those lucky enough to have enough space for a pool, installing a pool is one of the things that can add the most value in terms of outdoor home improvements, however you need to ensure that there is still plenty of garden space left otherwise the property value could drop.

Other water features can add to the attraction of your garden too as they are very relaxing and can often disguise the sound of a nearby busy roads and so on. Water is also a nice feature to have in the summer when it is very hot.

It is also very important to keep the garden looking neat. Grass that is left to grow can make the garden look uncared for and unattractive to buyers so make sure you always cut the grass and get rid of any weeds.

These are just a few ideas on how to increase your home’s value by getting a remortgage, however there are lots more ways so why not take a look online for other ideas. Don’t be afraid to get creative - it could be a great investment in the future!

When considering home improvements for your property, it is vital that you don’t neglect the outside of the house. A garden improvement project could add value to your home so that when you come to sell, it is worth more money as it will be more appealing.

Before you start, have a clear up in the garden and tidy it up a little. Hide bins away, cut the lawn, prune any hedges and trees and just generally make it look trim. Getting new plant pots and trellises can also help to make the garden look much neater than it did before.

Plants can be expensive but they are often cheaper in larger DIY stores than in garden centres so shop around and don’t pay top prices. A few new plants and flowers in the garden can make a big difference and you can even add in something exotic like a fruit tree!

Although slightly more expensive, adding in a water fountain or waterfall can really boost the interest in your property when trying to sell. The sound of trickling water is very relaxing and many people will love the idea of getting home after a hard day and chilling out in their new garden.

Many people are concerned today with green issues so show you care by adding something green in. Even a wooden seating area with solar powered lights or something simple like that could interest green buyers and boost the value of your property.

You need to ’stage’ the garden so that potential buyers can see themselves in it. Some strategically placed garden furniture made of lovely natural woods can make the garden look really lovely.

If you have a garage then you might want to consider converting it into additional living space - it could make a great playroom for the kids! If you don’t quite want to spend that much then you can simply leave the space very tidy so that buyers can see the potential.

If you have a small garden at the front of your home but nowhere to park the car, you could transform your front garden into a drive to make the property more appealing. Only consider this if you have a rear garden however as removing all garden space can devalue your home.

One of the most important things to remember is that whatever improvements you decide to do, ensure that the garden is easy to look after as high maintenance gardens are off-putting to buyers.

If you’re not sure how to finance a garden project then why not consider getting a remortgage as you can borrow the funds that you need without any fuss or high interest rates!