Semi Commercial mortgage options
If you are reading this article on “semi commercial mortgage products” I guess you’re trying to do your own research so I thought I would give you some pointers.
I’m a professional Mortgage Broker and most conversations I have on semi commercial mortgages start with: I have asked my bank manager about finance and they have said “no”. In the past the decision was mainly down to your status or the property type – now it’s probably because they simply do not have the expertise in the branch to take the new business to do with different type of semi-commercial mortgage products.
The better news is the rise of Challenger Banks offering a range of semi commercial mortgage products to fill the void and their mortgage lending policy is often more adventurous than the traditional conservative approach of the “high street” banks.
So what can the Challenger Banks offer via Niche Advice?
- They consider smaller transactions.
- They will lend to a customer that has had no previous relationship with them but may insist that you go via a professional mortgage intermediary, such as my firm Niche Advice.
- They might only want a 25% deposit.
- It could be that you do not have permanent rights to reside in the UK.
- The commercial element may be “smelly” such as a launderette or fried chicken takeaway or open at unsociable” times such as a bar.
- Past poor credit conduct may be accepted.
- Often better flexibility over the Mortgage Term and Repayment method.
- Potentially quicker. The Challenger Banks are focused on lending in this area. Their systems and processes are generally more modern and operate will less underwriting bureaucracy than a typical High Street Lender.
- Supplementary products such as bridging and development finance together with a range of standard and commercial products, so you can have the same funder for different projects.
Don’t get me wrong the High Street is always going to be better priced when it comes to rates but often other factors (such as the above) play a major rule into why a landlord would opt to get a semi commercial mortgage via Challenger Bank.
The easier semi commercials to fund are where there as a greater residential square footage than the commercial element. For instance a high street shop with two flats above it. And, where you have prior landlord experience are looking to purely let this next venture rather than run the trading business as well.
Many landlords are diversifying into semi commercials and away from pure residential lets to achieve better rental yield and some cover against Tax changes on traditional Buy to Let properties hence the greater demand for semi commercial mortgage products.
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