Church mortgages

For most churches buying a building or raising a mortgage only happens once in a lifetime, so it is important for churches to understand where they can look for help and to have an awareness of what some of the pitfalls may be. Church Growth Trust (CGT) has just revised and updated its briefing paper on mortgages for churches. It can be found on CGT’s website: www.churchgrowth.org.uk/ briefing-papers. It tries to raise awareness of some of the issues and considerations that arise to help churches and Christian charities through the process of raising a mortgage or purchasing property.

Probably the most important point to make is that proper planning and preparation are crucial. Trying to save money by doing everything yourselves has often resulted in major difficulties for churches and charities. Expert advice is not free, but it can end up saving considerable cost. Enlisting the help of advisers on mortgages, as well as building, planning and insurance and having a good accountant, can be invaluable. It is also important to engage with advisers at the earliest opportunity, as sometimes there are many issues that should be addressed long before looking for properties to buy or arranging a mortgage. These could be things like changing to the most appropriate charity structure, saving for a deposit or ensuring that your accounts and policies are all up to date.

Mortgage broker

Simon Shefford of Church Mortgages, who co-wrote the briefing paper, says, “Raising a mortgage from an external lender can be a lengthy and complex process. Church borrowing is very different to the residential mortgages most of us have on our houses. It can be difficult to find lenders who understand churches, and professionals who can give appropriate advice. Remember also that a church will enjoy none of the

protection an individual enjoys under consumer legislation. I am an independent mortgage broker with 34 years’ experience. I have helped churches and charities to obtain competitive mortgages for church buildings. There is a big gap between most churches and the lenders that I help to bridge, with my experience in the loans market. Having been a pastor & trustee of a church also helps!”

Simon Shefford can be contacted at Church Mortgages on:

Tel: 01604 643399 Mob: 07713 121515 Email: simon@churchmortgages.co.uk Web: www.churchmortgages.co.uk

Every church needs a clear vision and the building you might want to buy, refurbish or extend has to fit with that vision. You will need to assess the costs, not just for the purchase and refurbishment, but also for repairs, ongoing maintenance and utilities, and consider how you want to structure any loan (length, deposit, fixed or variable rates, early redemption costs and up-front costs). The briefing paper covers all of these and many other issues.

Church Growth Trust has worked with three organisations who offer mortgages. In 2014 Simon Shefford negotiated with CAF Bank to provide a mortgage for CGT to build a new church building known as Miracle House in Wickford. CGT was birthed out of Stewardship in 2010 and still has close links with them. CGT also works with Kingdom Bank. All of these organisations offer mortgages to churches, so they were asked to comment for this article.

CAF Bank

CAF Bank has a shared social purpose with the charities it exists to support. It provides secured loans from £150,000 to £5 million, for up to 25 years, to help churches fund the purchase or development of residential property and meeting places.

By engaging banks early in the planning stage, you can find a lending partner that understands your vision and work together to bring your project to completion.

CAF Bank is experienced in working with churches. Projects supported include the refinancing of a church, where its commercial terms enabled the church to dramatically shorten its mortgage, the purchase of staff accommodation and part funding an annex build which opened during the pandemic to support its community.

Borrowers benefit from the support of a Relationship Director, bringing understanding, experience and professionalism, and terms designed for charities.

Find out more:

Tel: 03000 123 444 Email: clientrelations@cafonline.org Web: www.cafonline.org/church-loans

Stewardship have been providing loans to churches and charities for over 25 years. They started doing this because churches were struggling to get finance for building projects from traditional lenders. Today they have a loan book of over 110 churches and Christian charities across the United Kingdom financing building purchases, and refurbishments to large development. Their approach is to provide relational expertise and understanding of the client ministry need and partner with you to execute your project successfully. Clients appreciate their service because they talk your language, they understand how your ministry works and what you are looking to achieve. A recent example of their work is where they have helped a church with finance to finish off the development of their new church building where they had struggled to get funding from traditional funders. Two years later, the church has now moved into the new building successfully and have grown substantially in size as a result. Stewardship were delighted to see the potential in this client and their project and see it to execution.

Contact the lending team

lending@stewardship.org.uk

Link to our page

www.stewardship.org.uk/loans Kingdom Bank offers mortgages to churches, Christian charities and Gospel workers (including missionaries) for the purchase or renovation of property, subject to meeting the Bank’s eligibility criteria. The Bank is often able to lend when high street banks are reluctant to do so, due to their understanding of the nature of church structures and income. One of the great things about Kingdom Bank is that the leadership and customer-facing teams are all Christians. Customers feed back their appreciation that the Bank speaks their language and understand Gospel ministry and church finance.

Kingdom Bank’s typical church mortgage types include, but are not limited to, premises mortgages, housing mortgages, community enterprise mortgages and community housing mortgages. One example of a how Kingdom Bank helped a church was by providing a mortgage to the church at a time when their high street mortgage application was moving slowly. The client commented on how Kingdom Bank was able to understand their finances, explain the process clearly and help in completing their purchase of the property. This enabled the church to have a permanent home and for their ministries and local outreach programmes to grow.

To find out more, please visit:

www.kingdom.bank/borrow/churchescharities/overview/ or contact Andrew Atkinson at Andrew.Atkinson@kingdom.bank or 0115 921 7280