Semi Commercial Mortgage in Cheshire
Following the implementation of the 3% Stamp Duty surcharge on second properties some investors began to take more of an interest in properties which require a commercial and semi commercial mortgage. This type of property is exempt from the 3% surcharge and as it consists of a mix of residential and commercial it offers a balance mix of risk and reward.
Here are some examples of property types that are classified as semi-commercial.
- Shops with flats above
- Offices with flats above
- Pubs with self-contained living accommodation
- B&Bs with owner’s accommodation
- Home based health and beauty clinics
These mortgages are available from a more limited range of lenders and will typically be on higher rates than residential. Arrangement fees will vary from around 0.75% to 2% and rates will often be ‘Bank of England Base rate’ plus 3% or more. Loans can be on a Capital and Interest or Interest Only basis.
If the residential element is on a buy to let basis, the interest coverage ratio will be applied to that element. The commercial element will be judged on a mix of the business performance as shown through its accounts and/or the lease arrangements depending on whether the applicant is an ‘owner occupier’ – in other words they are the business owner, or whether the applicant is a landlord investor and the business is a tenant only.
Next?
At Aspire Financial Services we have helped a number of clients in both and ‘owner-occupier’ capacity and also investors seeking to maximise their returns.
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