What are Semi Commercial Mortgages?
A semi commercial mortgage is a mortgage that is used on a property that is of mixed use. This means that the property is used for both residential and commercial. This type of property also benefits from being exempt from stamp duty. If you’re commercial property also has living accommodation it will be classed as semi-commercial.
Semi-Commercial property types
The below is a list of semi commercial property types, if the type of property you have or intend to purchase is not on the list then you will need to apply for a more standard commercial mortgage.
- Pubs with living accommodation
- Holiday parks with residential accommodation
- Guest houses with owner annex/accommodation
- B&B with owner accommodation
- Boarding Kennels/Cattery Business with owner accommodation
- Any property with flats above and a business on ground floor
Semi-Commercial Mortgage Best Rate
To get the best rate for a semi-commercial mortgage lenders will be looking to see that you have a successful track record or at least experience in running or letting commercial properties. This also includes buy to let properties.
First Commercial Property?
If this is the start of your experience with commercial mortgages then there are still lenders out there that will accept your application. Expect the rate you are offered by a lender to be slightly higher as there is more perceived risk lending to someone with less experience but if you have evidence of outside income and own another property you stand a good chance of getting a semi-commercial mortgage.
What if I have bad credit?
If you have bad credit in the past it is still possible to get a commercial mortgage but it will limit the lenders willing to consider your application which is why it is important to speak with an experienced bad credit mortgage broker. Our bad credit specialist brokers have the experience and knowledge to be able to guide you and find lenders that are more likely to consider your application. There are specialist lenders that can help if you have missed payments or had CCJs & debt management plans in the past. The further ago the bad credit the stronger your application will be. If your bad credit was over 5 years it will no longer appear on your credit file which is good news and lenders are more likely to accept you than if you’re bad credit history is more recent.
Mortgage Processing Time
Processing time vary and are different for each application, this will depend on a number of factors from how long a valuation takes to the quality of your application and how long it takes you to get your documentation together. Typically it takes 2-3 months from application to completion but this can be quicker if your application is straightforward.
Documentation you will need
- Photo ID and proof of address
- Income statement – P60s /SA302s / Tax returns / SA100s
- Mortgage history
- Credit Report
- Evidence of Property Portfolio (If any)
- Lease documentation (If any)
If you get all of this information together and speak with a specialist advisor with all of this to hand it will make the application process quicker and more straight forward.
Mortgage Terms for semi-commercial properties
The minimum term for a semi commercial mortgage is 2 years and the maximum term is up to 30 years, the maximum will depend on the age of the applicant. The maximum loan to value for a mortgage of this kind is up to 75% meaning you will need 25% for a deposit or assets to use as security.
Rates for mortgages start from 2.5% above Bank of England rate but the rate you are able to get will depend on a number of factors and your specialist advisor will be able to get you the best rate based on your personal circumstances.
You are able to get a semi-commercial mortgage from 25K upwards with no real limit as long as lenders affordability and other criteria is satisfied.
Get Expert Advice
Due to the complex nature of this mortgage product it is advisable to consult an expert who will be able to search the whole market and find you the best deal for your circumstances. Get in touch today by calling us or filling in one of our enquiry forms to give your application the best chance of being approved.