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Article: ASC Financial Solutions: Re-mortgage

Looking to raise finance? A commercial re-mortgage might help in different ways.

Re-mortgaging or re-finance is one of these terms that we hear often, sometimes without necessarily understanding what it means. A re-mortgage is a change of the mortgage deal on your property, either by switching it to a new lender, or by moving to a different rate with your existing lender. It can be an effective way to find lower interest rates and better mortgage terms, but what you are generally doing is “swapping” the terms you have for different terms, with different conditions attached. You are generally talking about using the same underlying security, which is generally a property.

Why can a re-mortgage be a good idea to businesses?

There are lots of reasons why borrowers might choose to re-mortgage their commercial property and they can include:

  • Often, if your current deal is about to expire, you will then be out on your provider’s standard variable rate, which tends to be much higher. Re-mortgaging can therefore help you to move back onto a lower interest rate.
  • If you need cash for your business for purchase, expansion or other reasons, you might be able to release equity from your property when you re-mortgage (A way of accessing cash from your property without moving.)
  • If the value of your property has increased, your lower loan-to-value might help you qualify for better interest rates.
  • If your business has done well and you have managed to build up a cash reserve, you might be able to use this money to offset against your mortgage debt with an offset deal (linking your mortgage to your savings account). An offset deal is a loan with lower monthly repayments.

Henry Ejdelbaum, MD, comments “The objective of a re-mortgage or a re-finance for a business is simple, to be able to get a better deal thereby reducing your monthly payments and improving cashflow. In the long term, any extra cash saved for your business is valuable and if you add into it a few years of interest and repayments, it can mean something positive.”

Thinking about re-mortgaging or wondering if you can get better terms? It is worth speaking to a broker who might be able to help you understand the options available to you and what could be the most effective solution for your business.

ENDS

For further information please contact:

ASC Finance for Business

Johan Da Silva

020 7616 6634

johan@asc.co.uk

www.asc.co.uk

Notes to editors:

About ASC Finance for Business

ASC was established over 50 years ago; we are independent business finance brokers. We have developed a successful track record helping businesses across the UK secure finance by removing the hurdles put in their paths. We have extensive knowledge of the financial products available from lenders and can approach them to help businesses find the right finance for their projects.

Our local directors are highly experienced and have a strong commercial background which will help your business increase their chances in securing finance.  ASC enables businesses to have more free time to focus on and develop their business.