Residential/Commercial mortgage woes

Buckers001

Hi everyone, I would really like your help.

We are buying a non-working farm with over 30 acres of ground and some unused outbuildings. The main farm house has an annexe attached which could be used as a holiday let but we are using it purely as an annexe for elderly family. There are two title deeds, one covering the access road and buildings (farmhouse, annexe, outbuildings) the other the land.

Our broker is telling us we need a commercial mortgage but this involves a much higher deposit which we aren't too keen to do. On the EA details, there is no mention of commercial property and we are buying it purely to live in. Is it not possible to transfer (and increase) our current residential mortgage to cover the residential buildings. Then gain a separate commercial mortgage (if necessary) to cover the land.

I would welcome any thoughts/advice.

tlats

Hey, I had a similar problem and unfortunately it ended with not being able to get the mortgage at all - we have now moved on to a purely residential property. This was despite wanting to borrow only 60% LTV.

What matters is the current usage of the property, not what you want to use it for. Since it is currently mixed use, you need a commercial mortgage. You can then apply for planning permission to change the use.

While it is still mixed use, you will also have to pay the applicable business rates on the property. If you can get it changed to residential only, then the council tax will need to be reassessed also as it will probably go up since there is more residence.

You could ask the current owners to start the planning permission process - if they are keen to sell and you can set this up with them. You might also want to consider a bridging loan to cover the start of the process and then go to a residential mortgage.

It's a P in the A, honestly, and I had to give up the dream of living in a Grade 2 listed ex-Thai restaurant just because we couldn't find a lender to take it on. A decent mortgage broker might be able to help. You can also consider starting an actual business that happens to have no activity and makes no money, and then apply for business rates relief.

Good luck.

ACG

The lender will only secure their money against the property once it fits their criteria. As it stands I can not think of any residential lender who will lend against it, certainly not at normal rates.

You could do a bridging loan, sort out the problems and then try and get your mortgage secured against the property.

Everything is either going to be expensive and/or require a large deposit.