Industrial Mortgage Repayment Options

When selecting an industrial property, it is essential that you choose a property that is appropriate for the business that you intend to operate in that location.

Assuming that the geographical location of the site and its transport links are satisfactory, a number of other factors need to be considered when deciding on the suitability of a particular property. Ask yourself the following questions:
 Is there adequate space for the proposed manufacturing and / or warehousing functions?
 How much office accommodation is required?
 Are existing loading and unloading facilities appropriate for the planned levels of business and, if not, are alterations to the site possible to rectify any problems in this area?
 Will there be an on-site direct sales outlet?
 Are there sufficient parking spaces for staff and visitors?
 Are utility services (electricity, gas, water, sewerage) to the site adequate for the purposes that will be required?
 Are the building’s electrical, plumbing, telecommunications, security, heating and ventilation systems fit for purpose?
 Are there any health and safety considerations that need to be addressed?
 Is room for expansion likely to be required in the future?

Industrial Mortgage Repayment Options
Mortgage lenders offer a variety of mortgage repayment options.

Interest Rates:
 Fixed Rate: rate unchanged for a fixed period (often 5 years);
 Standard Variable Rate (SVR) : linked to Bank of England Base Rate or London Inter Bank Offer Rate (LIBOR);
 Capped Rate: variable rate that cannot go above an agreed maximum, for a fixed period (usually 2 years).

Repayment Methods:
 Repayment Mortgage: regular repayments of capital and interest throughout the mortgage term so that the debt is paid off fully by the end of the mortgage term;
 Interest Only Mortgage: interest payments throughout the mortgage term with the borrower making some other arrangement to repay the capital at the end of the mortgage term;
 Repayment Mortgage with Balloon Payment: interest payments throughout the mortgage term but only partial repayment of capital; at the end of the mortgage term the outstanding capital balance has to be paid off (the balloon payment).

Because business requirements change over time, it is common for industrial property mortgagees to review their mortgage arrangements on a regular basis.

Summary
 Many secondary issues need to be resolved when buying an industrial property;
 lenders offer a variety of repayment options for industrial mortgages.

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Industrial buying resources:
Help finding an industrial property
Industrial law