Semi commercial Mortgage?? HELP!

joannekerryreed

Can anyone please advise on the following:

I am wanting to purchase a property which is current being let as part residential and part commercial.

The residential side is a 3 bedroom house and the commercial side is a one roomed shop with additional workshop/storage.

I would like to obtain a mortgage but have been given conflicting information. First I am told i need a semi-commercial mortgage with a minimum of 30% deposit, with an AST for at least 1 year from the current shop keeper and also a AST from the household tenants.

Is this correct?

Why can't I obtain a buy to let mortgage? the resdential income covers more than 125% of the mortgage repayments and this would be easier to get as the current commercial tenants do not have a tenancy agreement and currently let the unit on an informal basis.

Can someone please advise. Thank you.

Senior_Paper_Monitor

I have no idea what a 'semi commercial mortgage is' !!

The normal buy to let mortgages will not apply to a retail component.

What you want is a commercial mortgage - but if you or your immediate family is to use the accommodation portion (making up more than 40% of total floor area) it will generally have to be a regulated commercial mortgage (which limits the choise of advisers and lenders more than a standard commercial).

Depending upon your background information/status and the negotiation with the lender the current held contract requirements (with thosn letting the relevant sections) will be defined - an AST does not apply to non-residential (i.e retail) lets, a basic lease is used.



Missed you point about deposit - 25% minimum requirement but 30% more likely. Final decision depends on overall business proposition.

joannekerryreed

Hi, thank you for your reply.

Yes I want to let out the shop and the house both to 2 different people.

Does this means i have to have an AST for the residential component and a basic lease for the commercial aspect?

Sorry to be a pain but the whole thing has become so confusing as I have had confilicting advice and I want to get this correct before I start a mortgage application.

I do have a 30% deposit and a good credit status but just not sure on the other criteria.

Thank you very much

Senior_Paper_Monitor

Yes - AST for residential - lease for retail. Your mortage can be unregulated (warning in the word) fot the project you describe

Have you considered using a broker/adviser for this ? I am always concerned when someone with apparently limited market knowledge/access approaches single/limted lender selection for product like this.

This is a serious sounding investment.