Semi-commercial mortgages are mortgages for properties that have a commercial and residential element. These are commonly referred to as mixed-use properties.
Most semi-commercial mortgages are not regulated. However, if 40% or more of the overall floor space is used for residential purposes and occupied by a tenant, then the loan will be regulated and the number of lenders available will be limited.
If you will be running the business yourself from the commercial element of the property, then most lenders will want you to have previous experience in this field. It is still possible to obtain funding, even if you do not have any previous experience, but the number of lenders available will be limited. Rates and fees charged by the lender may also be slightly higher.
If you are simply looking to invest in a property where you will be renting out the commercial and residential spaces, e.g. a shop with a flat above, then the lenders will typically look for previous experience letting commercial property, or buy to let property.
Most funders also want you to have a 25% deposit or more to purchase a semi-commercial property. Some lenders will lend more than 75% loan to value but they may require you to secure the loan against an additional property. The larger deposit you have available, the lower the rate you will be offered.
If you have had some past credit issues, then this will impact the types of lenders available to you. Don’t worry, we do have funders who will consider your application if you have had CCJs, missed mortgage payments, have been previously declared bankrupt or been in a debt management plan. Please ensure you mention any previous credit issues to our team as this will save delays further down the line.
The rate you will be offered will be dependent on all of the above, in addition to your experience letting property or working in the business field and your credit history.
Our Mortgage and Protection Brokers are very experienced in finding the best deal to suit your individual needs and understand the lenders’ processes to avoid any unnecessary delays. There can be quite a lot of paperwork involved when arranging a semi-commercial mortgage, so we complete this on your behalf to relieve you of the additional stress.
Our team are whole of market, so you can feel rest-assured that we will find you the cheapest deal and consider all lenders without bias. We offer a free no-obligation quote, so you can take advantage of reviewing the best deal available to you before making a commitment.
When arranging a semi-commercial mortgage it is essential to ensure your property is adequately protected. We have a team who will provide you quotes on the best insurance products for you at no additional cost.
If you are looking to purchase a residential property and need assistance raising funds to convert part of the property into a commercial space, then we can also look to arrange a bridging loan to help you do this.
To discuss a semi-commercial mortgage, call our Mortgage and Protection Brokers on 01702 538 800 or arrange a call back.