Semi Commercial Mortgages
Why You Need Advice With Semi Commercial Mortgages
What are semi commercial mortgages?
A semi-commercial property is a loan that is both a commercial property - like a shop or a restaurant - with a residential area attached. It might be that there is a flat above the premises or it might be a residential property that has partly been converted into a commercial venue. So semi commercial mortgages are needed for people who want to buy the business premises and then would like to live above it, or are buying the business and will earn extra income by renting out the living area adjacent to the commercial area.
Why are they complicated?
Semi commercial mortgages are so complicated because the purchaser buys the complete unit, both the commercial and residential elements. As you can imagine that brings up a lot of questions with regard to the property being used for commercial purposes as well as it being used for residential or rental purposes also. On top of that, lenders will treat semi commercial properties as a purely commercial mortgage proposition, despite the fact that there is a residential property element to the transaction. So semi commercial mortgages are doubly complicated.
What are the risks?
It's difficult to exactly pinpoint the risks of taking on semi commercial mortgages because there are so many different situations where a loan of that type is required. It might be that the owner of the business will rely on rental income from the residential part of the property to pay their way. Or it might be that the owner of the business will also live in the property, which then means they are relying on their business income alone to cover the mortgage. A situation that demands semi commercial mortgages needs to be carefully assessed and calculated to make sure it's feasible and will not put the business, the individual and the property at risk.
Even the lenders think semi commercial mortgages are complicated and risky. In the main, these loans are only available from specialised mortgage lenders, most of whom will only deal with specialised mortgage advisers - they know their semi commercial mortgages are complicated and as such, make sure every borrower gets the right help from the outset.
Semi commercial mortgages are truly some of the most complex and bespoke mortgages available in the UK. They demand a professional mortgage adviser to help with every step of the process and will continue to demand the help of a mortgage adviser throughout the term of the semi commercial mortgages. Bringing together a business and a buy to let enterprise or a business and a residential situation will throw up all manner of complications that should not be tackled alone.
