Mortgage on Part Commercial Part Residential property

Calders_2

Hello.

Can anyone help please? My wife and I have seen a property we want to buy. It is being sold as 1 property but has dual use. The shop at the front has commercial use, currently D1 and there is also a residential flat, all on the ground floor with a basement.

We are struggling to find someone to lend us a mortgage on the basis of us wanting to rent out the flat and the shop separately and have them as 2 new income streams. The biggest stumbling block seems to be our lack of experience at doing this, we have found lenders but they want 35-40% deposit and would charge huge fees and apply an interest rate of 12.4% upwards...obviously this isn't an option.

We have 25% deposit, plenty of equity in our house and 2 good incomes that. We are looking at paying £80,000.

Any assistance or guidance in the right direction would be appreciated. The property is in Manchester, if that makes a difference.

Many thanks

kingstreet

Your own clearing bank?

I tend to find with commercials and semi-commercials you spend weeks placing a case and the minute the client goes anywhere near their own bank, they are miraculously offered 0.5% less than you've struggled weeks to get.

ACG

The equity in your current home has vary little if any baring on it. Although you could potentially use that to raise some additional money for a bigger deposit.

There will be lenders who will do this without doubt. But the fees and/or rates will be probably closer to 5-6% with fees of upto around £2k. I think your deposit is a little bit on the light side and you could do with getting it to around 30%.

Best bet is to speak to a broker as you will struggle without one.

Mr_Magoo_02

Hi, can anybody help me!!!
I'm having a similar problem to Calders above. Me and my husband wish to purchase a property which is about 80% residential and 20% commercial, and so are unable to get a residential mortgage on it, but the commercial mortgage doesn't seem like a option either as from reading on the internet due to being more than 40% residential we would need a regulated commercial mortgage, is there anybody who can help as I seem to be going around in circles and getting very confused in the process. Any advice would be much appreciated.

Thanks

ACG

What you have read is correct, it does become extremely difficult to place once its above 40% residential.

Again, you will need a broker for this - best to avoid estate agent based brokers. It might even be worth paying the extra and getting a commercial broker on it.