Mortgage Lane are award winning brokers that specialise in mortgages for Semi commercial properties. If you are a new investor or business owner looking for mortgage options on semi commercial properties or a portfolio landlord, we can help simplify the path to securing a semi-commercial mortgage. Even if you’re venturing into this space for the first time, rest assured, no prior experience is required, plus you don’t need to own a home to qualify.
The first process in your semi commercial mortgage application will be gathering or updating information in relation to the property, tenants, or yourself. Once this has been established your broker will make a product recommendation.
Once you are satisfied with the product recommended and have confirmed to proceed, this will usually be submitted the same day to give you a decision, until this point there is still nothing to pay! As long as the Agreement in Principle (AIP) was approved, we can move to application stage where fees become payable.
Once the application is submitted, your valuation will be booked in and most of the time (depending on the lender) usually completed once your initial underwriting has been completed. Once the valuation is returned, if acceptable, the lender would then look to make a formal offer. You can then move to legal stage.
Once you have had your semi commercial mortgage offer, you will require adequate legal advice and then once you’re happy, your solicitor can draw this down once the legal requirements are satisfied. Your broker at Mortgage Lane will always be checking in on the application post offer, so we are chasing for you too!
With semi commercial properties being used for both investment and owner occupiers, there are a lot of different types of mortgage products and a lot of variations that might be required by borrowers. Below we explain all the types of variations you might come across as well as information on different ownership types and how this can impact your mortgage options.
With retail semi commercial purchases, it is good to check whether there is separate access and separate utilities. If so, you may have a split valuation which might be more generous, however if not, it will be valued as a block, as well as the rental valued as one.
With the retail unit, if this is rented then you may be able to use the commercial rental towards your affordability if you are eligible.
Owner occupiers may need to evidence accounts showing profit in order for the loan to be affordable with the cheapest avenues.
Retail shops with flats above are a common semi commercial asset, with Loan to Values up to 75%.
Semi commercial properties may also be grade 1 or 2 listed buildings, this means that they carry extra responsibility and regulation. For this reason, not all lenders accept these asset types but for those investors that are keen to purchase heritage semi commercial properties, Mortgage Lane can connect you with suitable mortgage products. These properties usually come with large ticket prices, so it is important the rental income is affordable to take a mortgages.
Speak to a broker at Mortgage Lane to establish your heritage semi commercial mortgage options.
At Mortgage Lane we have a well connected global reach of customers who we regularly assist with Mortgage Advice against semi commercial UK property.
For Expatriates otherwise known as Expats these are applicants where individuals are from the UK but now living abroad. Often we deal with expats in Dubai, America, Australia, New Zealand, China, Hong Kong, Singapore and many more locations.
Where every you are, we have lenders that are able to lend to expats in the following circumstances:
For Foreign nationals that are not UK domicile (tax status) are able to get a UK semi commercial mortgage, many of our investors reside in the above location and lenders typically base their lending around experience, credit foot print in the UK and sometimes a minimum income requirement. We do have lenders that will lend to a foreign national where the applicants have low income or no experience.
At Mortgage Lane we also assist overseas nationals get UK property mortgages where the country them are residing and where deposit funds derive, may be high risk on the Basel Index which is an annual ranking used by lenders to grade the countries Anti Money Laundering (AML) procedures.
If you also require a processing agent to make yourself eligible for UK mortgages, then we can also recommend a suitable company to assist you.
Public houses are also a common purchase in the semi commercial world. In terms of lending, the public house aspect will make your case more specialist. Being a higher risk commercial venture not all lenders allow for this asset type but there are lenders that have products specifically designed for this.
Borrowers looking to occupy these assets will need experience and good accounts to get the best products, however, applicants without such a good covenant may find mortgage options in higher tiers to help you get started!
Speak to an expert semi commercial mortgage broker today!
As long as your SASS or SIPP provider has permitted the intension of the funds, we work with mortgage lenders that recognise the source of these funds. Our lenders would need to see the trust documents associated with the SASS pension.
These products are not very popular, so to help guide you to the right one, please contact one of our expert advisors today.
If you’re thinking about putting semi commercial properties into a trust to save on taxes, you’re not alone. This setup means the properties are in the trust’s name, not directly yours. Some mortgage lenders might not be comfortable with this, but many are.
The good news is, there is a lot of lenders that do, so whether your properties are owned in trust in British Virgin Islands (BVI) or outside of UK jurisdiction, we work with mortgage lenders that understand these structures.
People set up trusts for different reasons, like planning for the future, sorting out taxes, or giving to charity. When a trust needs a mortgage to buy a property or manage its existing loans, it’s the trust that handles the repayments and any related costs. Be sure to speak with an accountant or solicitor before considering this is the best structure for you!
TRY OUR SEMI COMMERCIAL MORTGAGE CALCULATOR
Floor space % some lenders will have a minimum percentage that they would like to be residential, such as 60%. Valuation split between residential and commercial some lenders may have a valuation split ratio of 50/50. Some semi commercial properties have one access point which is a more complex lending situation, it is ideal to have two, but we have lending options for either. For borrowers without experience, you may have fewer semi commercial mortgage options, as well as applicant that are non home owners. The use type of the commercial unit(s) may also impact lending options, as Commercial is a broad sector with a myriad of sub sectors, lenders may not allow for all sectors within their criteria, such as a gym or car garage. Therefore it is important to disclose as much information as possible to your broker to avoid facing any declined applications.
At Mortgage Lane, we specialise in facilitating semi-commercial mortgages, particularly when navigating the complexities of properties with tenant lease durations shorter than the mortgage term. This specialisation includes understanding lender considerations regarding lease terms and how they impact affordability assessments.
Tailored Solutions for Varied Lease Terms in Semi-Commercial Mortgages
Adapting to Lease Term Challenges: Securing a mortgage for a semi-commercial property with a short tenant lease is achievable. While lenders typically prefer lease terms that align with or exceed the mortgage duration, we at Mortgage Lane can identify lenders who are flexible with shorter leases, sometimes under specific criteria.
Navigating Affordability Assessments in Semi-Commercial Lending
Consideration of Commercial Rental Income: In some cases, lenders may not factor in the commercial rental income when assessing affordability. Instead, they might focus solely on the rental income from the residential portion of the property. This approach is particularly relevant where the commercial aspect of the property has a shorter lease term.
Mortgage Lane’s Approach: We understand these unique lending scenarios and offer tailored guidance to investors. Our role is to ensure that you have access to mortgage options that suitably reflect the property’s mixed-use nature and the specifics of its rental income streams.
Professional Support for Complex Mortgage Scenarios
Seeking Expert Guidance: While Mortgage Lane provides specialised advice for obtaining semi-commercial mortgages under these varied conditions, we also highlight the need for legal, tax, or valuation expertise. Professional advice is crucial, especially concerning lease terms and their extensions or renewals.
Empowering Informed Investment Decisions: Our goal is to support clients in making well-informed decisions in the semi-commercial mortgage market. We commit to guiding you through the complexities of financing properties with shorter tenant leases and varied rental income considerations, ensuring comprehensive knowledge and resources for successful property investment.
Age is Just a Number! If you’re considering a semi-commercial mortgage after retirement, you’re not alone. Many lenders in this field offer flexibility with age requirements. To find the best fit for your post-retirement venture, reach out to us today!
If you’re an entrepreneur looking for a mortgage on mixed-use properties, consider a semi commercial mortgage. Your eligibility hinges on your financial health, credit rating, and business results. It’s wise to consult a commercial mortgage expert. Lenders assess loan amounts based on your EBITDA (earnings before interest, tax, depreciation and amortisation) ensuring your business is a suitable profitable security.
While application requirements differ across lenders, certain documentation is commonly requested:
Personal bank records (typically spanning 3-6 months).
Business financial statements (often covering 3-6 months).
For owner-occupiers, two years of account records to verify business profitability.
Income and expenditure details.
Many familiar high-street banks provide semi commercial mortgages. However, they often have rigorous criteria and typically favour uncomplicated cases. This is where challenger banks, although less recognised, excel due to their expertise and credibility.
Among the well-known names on our panel, you’ll find Barclays, Lloyds, Nat West, and Yorkshire Building Society. Additionally, we feature esteemed commercial mortgage lenders including Allica Bank, Interbay Commercial, Recognise Bank, Shawbrook, Reliance Bank and Redwood Bank.
It is important to note that semicommercial mortgages are not covered by the Financial Services Compensation Scheme, so borrowers should ensure they are dealing with a reputable lender.
Choosing between high street and specialist lenders for a semi-commercial mortgage? Established semi-commercial mortgages can often be more cost-effective with High Street lenders. However, they typically demand more experience. On the other hand, specialist lenders may not be as stringent on experience requirements, and their rates have become increasingly competitive over time.
Mainstream lenders might be hesitant, but there are niche lenders out there who might accommodate borrowers with adverse credit. For semi-commercial mortgages, the credit history of every individual in the ownership team matters. If you’re dealing with adverse credit but are keen on a semi-commercial mortgage, please contact us here.
Besides traditional semi-commercial mortgages, other avenues to consider include equity release from existing properties, prompt bridging loans, or development finance – ideal if you’re aiming to revitalise an older commercial property. And if a business loan is what you’re after, we’ve got you covered!
Commercial mortgages are typically unregulated. However, if a property comprises over 40% and if the borrower intends to reside within it, it invariably becomes a regulated financial product. This distinction may influence lender considerations but doesn’t preclude obtaining the necessary semi-commercial mortgage.
Commercial lenders commonly offer terms up to 25 years, with some extending to 30 years. However, extended terms might come with higher rates and more rigorous conditions.
For a concise term, such as 2-5 years, we can potential obtain a mid-term mortgage on the Semi Commercial property, which usually comes with lighter criteria requirements. Shorter than this would require bridging finance.
Semi Commercial mortgage rates generally surpass residential rates due to the perceived increased risk. Rates can fluctuate between 6% and 14%. It’s uncommon for us not to identify a fitting lender for your situation, even at the higher end of this spectrum.
Learn more about semi-commercial and commercial mortgages with Mortgage Lane.