Mortgage for business to turn to home.

lukerichardson40

Hello all,

I hope someone can help here. I am looking at buying an old school to turn in to a home. The place is currently registered as a business. Does anyone know of anywhere I can get a mortgage for it while it is still a business with view to change the use? I have tried lots of places and no one will even consider it.

I have an offer in on it, and so does someone else. I understand that the other person does have this kind of mortgage in place apparently, but that isnt definate.

So basically I want to buy a business to turn to a home. The local council says the chances of permission to change the use is highly likely, but I havent submitted the planning yet. I need to move fast to ensure I get it and the other person doesnt. Please mail me at lukerichardson40@hotmail.com if you can offer any help!

Thanks very much and have a great Christmas!

Luke

Thrugelmir

You'll need to obtain a commercial loan to purchase the property. Until change of use is granted you won't be able to obtain a residential mortgage. Even then its value may be lower than you expect, as the property obviously will require some conversion work. So lenders will be wary.

Suggest you start with a High Street bank.

Wh05apk

You will struggle with this, until you get change of use, you can't get a commercial mortgage as such as you will not be using it for commercial use, you may be able to get some sort of bridging finance on this, however the LTV will likely only be 70% or so, could you raise the funds elsewhere against other property?

lukerichardson40

Raising funds is not an issue and I have 30% deposit for the place already.

The estate agent says the other person has this type of mortgage in place already (he is awaiting confirmation) and does intend to use it as a home. Do you think the other person is mistaken / lying? That is what it would seem to me. If he is, that would mean it is mine and I just have to get planning before I can formally sign everything and exchange contracts.

The building itself needs very little in the way of conversion. There is already a kitchen and a bath / shower room there. All it needs is furniture.

I really appreciate your input, thanks very much.

Wh05apk

If you are able to raise funds against another property, that will be ideal, you are then effectively a cash buyer.

lukerichardson40

Sadly I am a first time buyer and have nothing to sell. Anything else you can perhaps suggest? Appreciate the help. Do you think the other buyer is confused then?

holly_hobby

Its already been said, its a commercial property until the change of use has been approved by your LA - and how definite is this really ?

Notwithstanding this, at the current time a residential or semi-commerical mge is out, commercial would be the only alternative - but you are looking at hefty set up fees, exit fees and rates - and there may be uw issues as you don't intend to actually operate the property as business prems.

As already suggested, if you could raise the cash elsewhere and pch outright with cash this would solve your initial probs in sourcing a lender. (or possibly source a bridging loan, subsequently remotgaging onto a residential mge when your change of use completes).

Either way, mortgage wise .. you'll have issues ...

Hope this helps

Holly

collen

On your situation you can opt to apply for commercial mortgage. look for some alternatives idea maybe someone will consider it.

lukerichardson40

Thanks very much for all your help everyone. I will be talking to my fathers business advisor to see what options he can think of too. I really appreciate all your input.

I hope everyone has a fantastic Christmas and New Year!

Luke

lukerichardson40

Update for everyone... the way we are doing this is that my father has kindly offered to buy the place for cash. I am then applying for change of use then to buy from him later on. Alright if your are lucky enough to have someone who will do this.

Thanks again for all your suggestions and I hope you all have a fantastic Christmas and New Year!

Wh05apk

lukerichardson40 wrote: »

Update for everyone... the way we are doing this is that my father has kindly offered to buy the place for cash. I am then applying for change of use then to buy from him later on. Alright if your are lucky enough to have someone who will do this.

Thanks again for all your suggestions and I hope you all have a fantastic Christmas and New Year!

By doing that way you will have to pay stamp duty twice, could you perhaps buy in your name, but your father places a charge over it equivilant to the amount he has lent you, you could then remortgage later (most lenders will insist you wait 6 months from ownership) and pay him back, only incurring one lot of stamp duty and legal fees etc.