Commercial mortgage for residential property

AliceBanned

Hi

Does anyone know whether it is possible to get a commercial mortgage on a residential property? I have tried unsuccessfully to get a residential mortgage in the current climate (I was offered one on the same property 4 or 5 years ago but could not go ahead due to change of job).

I recently went to a day on property investment with Tigrent and this is where I first heard that there are different options. The property is concrete and I can get it at a very good price but just can't get a mortgage. It has been reinstated with brick, according to the engineering company's certificate "to mortgageable standard".

I don't want to go on as I've been on here about the flat before. I now have a lodger so am saving up to buy an alternative place but still think it's good value as an investment (housing assoc right to acquire), and besides this I really enjoy living in the flat. . So I can't resist ruling out all options as it is a good financial opportunity although I would be a first as no one else in the whole street has bought theirs - not a good sign perhaps but at £58k I have to look into it fully, as it is a large one bed flat in Herts - half the price of many in the area.

holly_hobby

No, you won't secure a commerical mge on a residential dwelling (to do so would require it to be registered as commercial via change of use via your local authority). Plus the fact that commerical mges are much more difficult to obtain inc the requirement of business plans etc - as you are assumed to be conducting a business, and much more costly than a resi mge in any event.

Unless you can pch for cash, you're back to the drawing board I'm afraid .... notwithstanding, if you are struggling to secure a resi mge due to the build, how do you intend to sell it on in the future (apart from solely seeking cash buyers of course !) ..... my advice would be to walk away from this one.

Hope this helps

Holly

AliceBanned

holly_hobby wrote: »

No, you won't secure a commerical mge on a residential dwelling (to do so would require it to be registered as commercial via change of use via your local authority). Plus the fact that commerical mges are much more difficult to obtain inc the requirement of business plans etc - as you are assumed to be conducting a business, and much more costly than a resi mge in any event.

Unless you can pch for cash, you're back to the drawing board I'm afraid .... notwithstanding, if you are struggling to secure a resi mge due to the build, how do you intend to sell it on in the future (apart from solely seeking cash buyers of course !) ..... my advice would be to walk away from this one.

Hope this helps

Holly

Hi Holly

Thanks. yes looks like the sensible option then. I was prepared to walk away but trying to rule out every reasonable option first. I don't mind a small amount of risk but this one would be tricky - I have to bear that in mind - think I could get a cash buyer at that price however. A buy to let landlord could make 7% yield instantly. Likely I won't risk it though as I can save and buy elsewhere anyway. I am looking for a bargain but it has to be 100% right.

holly_hobby

The non-std structre wouldn't be suitable for a BTL mge in any event (which is semi-commercial finance), whilst it may be ok for a commercial venture (ie no residential use whatsoever).

Yep, my own feeling in this is to walk away - if you are looking at entering the BTL market, you need a habital residential unit, if you are a first time landlord max ltv is 75%, if you also have no prev mge history, you'll struggle to secure a BTL mge as your first venture into property ownership.

A chat with a whole of market broker will assist further.

Hope this helps

Holly