Commercial mortgage

[acealfa]

Hi all,

I’m wondering if anybody with knowledge of commercial mortgages could give me some information on what I’m trying to accomplish.

I’ve been toying with the idea of renting a unit to tinker with my cars but have always been put off by the cost of rent.

I’ve since seen a unit come up for sale (£100k) that I feel I could afford with a mortgage but I’m unsure the process. Would I need to set up a business to apply for a mortgage? I’m not really looking to have a business but use it more for myself paying for the mortgage out of my current employment.

My thinking is that if i was to lose my job I could also let out the unit?

Many thanks

[craigjm]

You will be able to get a commercial mortgage much like a buy to let and you don’t need a business to do it. You will need at least a 20% deposit usually through

[acealfa]

That’s good to know, I’ll have to enquire. I knew the deposits are quite high but not sure of rates.

[craigjm]

Rates are a bit higher than residential property depending on your circumstances. Don’t forget to work out the running costs such as the need to find out what it’s ratable value is for business rates etc. It will have higher running costs than a lock up

[PT88]

craigjm said:

You will be able to get a commercial mortgage much like a buy to let and you don’t need a business to do it. You will need at least a 20% deposit usually through

Can you confirm any Tier 1s currently lending to a 80% LTV in current climate?!

[matjk]

Your criteria will make it harder to get a mortgage. Your not an owner / occupier and you don’t have proper plans to rent it out. The bank will want to know what your plan is, expect more than a 20% and also expect a debenture for a big chunk of the money in case you find yourself in a position where you can’t pay the mortgage.
Rates will be payable and it depends how it’s classed and valued . You are responsible for them even if the unit is empty .
We got ours via HSBC but we use the unit and the business was doing well at the time (non vivid happy days) . We got the unit well under it’s true valuation , think paying 150k for something worth 280k , and still we had to sign up for £40k personally on top of the decent deposit .
It can certainly be done but I can see lenders being very risk adverse right now . Plus what do you expect commercial property value to do in the next 6 months ? Be amazed if it even stayed stable

[craigjm]

PT88 said:

craigjm said:

You will be able to get a commercial mortgage much like a buy to let and you don’t need a business to do it. You will need at least a 20% deposit usually through

Can you confirm any Tier 1s currently lending to a 80% LTV in current climate?!

No which is why I said “at least”

[acealfa]

I believe the rateable value is 7-8k but I thought anything under 15k meant you currently don’t have to pay anything. I could be wrong on this though.

Unfortunately I do think there may be a lot more properties coming onto the market after the fallout from this virus.

[Pot Bellied Fool]

Speak to Graham at https://www.mortgage-find.me/commercial-mortgages/ 01704 808286, he's my go-to fella for anything along these lines. He'll give you ma no-nonsense idea of whether it's doable or not.