The product suite has been split to provide a tailored solution specific to both owner-occupied commercial properties and investment properties.
For owner-occupied properties there are now five products in total, three designed for commercial and semi-commercial property, one for residential property with a business use and a specific scheme for farms. The commercial and semi-commercial products, COM1 through to COM3, differentiate between borrowers who can provide audited accounts, unaudited accounts or utilise the self-certification of income. Business applicants can now cascade between these three main options depending upon the quality of their financial information and also their credit profile. 85 per cent loan to value (LTV) is provided on all three options with pricing ranging from 1.65 per cent to 4.95 per cent above three month libor, depending upon the financial information, credit profile and LTV requested. In addition a “Trading from Home” (TFH) scheme specifically caters for business borrowers seeking a business loan and who work/trade from their residential property. This product is also available to borrowers looking to purchase or remortgage a work/live-in unit.
Private investors looking to acquire commercial property assets have been targeted with the ‘Investor’ range of products. A simple pricing scheme based upon property LTV has been designed, with margin reductions available for longer term tenant leases. Pricing ranges from 2.25 per cent through to 3.35 per cent above libor up to 75 per cent LTV. Rental cover requirements are either 115 per cent for interest only repayment options or 100 per cent for capital and interest loans. The interest only options now available include three year periods, five year periods and, for the first time, a full interest only scheme for loans up to 65 per cent LTV. To provide even greater gearing for the investor, a LTV of 85 per cent has been made available, with the ability to include outside income in the application to help service the loan.
Lender arrangement and all legal charges (including VAT & disbursements) have been combined into one completion fee, payable only on drawdown. No undertaking for costs if a case is aborted, or any application fees are charged. This fee is now added to all loans up to 75 per cent LTV. Intermediary commission remains uncapped between the ranges of 1.00 per cent and 1.5 per cent on the owner occupied range and 1.5 per cent for the investment range. This procuration fee is available for directly submitted and packaged business, or from referring cases to the lenders key partners.
Stephen Johnson, sales and marketing director at Commercial First, said: “We have made a big commitment in widening the scope of our product range; re-investing the scale we now have in the business to improve pricing and broaden our appeal. Our primary focus has always been owner occupied self-cert borrowers, and whilst we remain absolutely committed to this sector, we also felt it was important to support our intermediaries and provide our same straightforward mortgage approach for more status borrowers and also commercial property investors.
“Intermediaries in this sector need lenders that have more than just a narrow focus or appetite, lenders they can build volume and personal relationships with, and lenders who can support their marketing spend with a broad range of products that are competitive and importantly rewarding.”
The product launch follows the recent introduction by Commercial First of the CFI – a comprehensive one page summary of all the costs, early repayment charges and mortgage terms (including variations post expiry of fixed & interest only periods) that intermediaries can provide to their clients.
Philip George, managing director of Commercial First, commented: “We are excited about our new plans and the future direction of the business, we believe our transparent and simple mortgage approach to commercial lending is setting the standard required to really galvanise the intermediary market and drive this sector forward.”
