When looking to buy any property for commercial use, such as an office, shop or restaurant, a commercial mortgage is necessary to complete the transaction. Even if you're buying a mixed-use property with both residential and business spaces, such as a pub with an attached flat or house above it, the same applies. In addition, specialised buy-to-let mortgages are needed to purchase residential properties intended for renting out.

What is a semi commercial property?

A semi commercial property or also known as a mixed use property is one that supports both residential and commercial elements together. For example, a pub or a shop with a flat above is semi commercial as there is a business and a residential aspect to the same building, they can be mortgaged separately and together.

Semi commercial mortgages

Semi-commercial property mortgages would be suitable for the following properties:

• Commercial units with flats connected
• Pubs with self-contained accommodation
• Businesses operating in the home
• Buildings with self-contained offices and flats
• Guest homes that are mortgaged

They can be mortgaged together or separately but this type of mortgage will require a specialist lender, a specialist independent mortgage broker will have access to the correct lenders to have your application approved.

Specialist lenders that are providing semi commercial mortgages may require additional documents compared to a standard mortgage due to both elements of residential and business being within one building. There will be a certain loan to value that you will need to meet. Also, there is no maximum loan size, however, the lenders may have a minimum loan requirement from 50k.

Commercial Mortgages

The process of securing a commercial mortgage is more complicated than that of a residential loan, as it requires an in-depth assessment of the business's cash flow and long-term security. Businesses can vary greatly so lenders will have their own specific criteria that you must meet in order to be approved for a loan.

In general, commercial mortgages typically require larger deposits than residential loans and have shorter terms - often one to 25 years. You may need to raise the capital to fund the deposit from your business's own resources, so it's important to seek advice from both a mortgage broker and an accountant to make sure you get the best possible deal.

To ensure that your commercial mortgage remains the most suitable option for your business, it is important to keep in touch with your lender on a regular basis and review your loan every couple of years. Your financial circumstances or those of the business may have changed over time, which could mean that another lender may be able to offer you a better deal. It is also important to keep up with any payments, as failure to do so could lead to the loan being called in early or your business is subject to additional fees or penalties.

Conclusion

Overall, finding a suitable commercial mortgage and making sure it works for your business requires careful consideration of the terms and conditions of the loan, as well as your own financial situation. You should take a holistic view of your mortgage to make sure it remains the right choice for you in both the short and long term. By doing so, you'll be able to reap the benefits that a commercial mortgage can bring.

The process of securing a commercial mortgage can be complicated and time consuming, but is made much easier with the help of an experienced mortgage broker. They will be able to assess your requirements and advise you on the best options available for your business. A good broker will also know which lenders are most likely to approve your loan application, as well as help you to negotiate a favourable deal. So, if you’re looking for a commercial mortgage, it is always worth enlisting the help of an expert.

If you are interested in a semi commercial or commercial mortgage contact us today on 0151 662 0188 or email [email protected].