Can u get larger mortgage if house generates cash?

[torqueofthedevil]

I intend to one day buy a house with some land and open a b&b. Depending on what my finances are like I would imagine I would have to take out a larger mortgage than they would usually lend. (supposing I kept my job and OH ran the b&b).

Would they take into consideration a business plan and the earning potential of the property?

[Jasandjules]

I would guess that you would be looking at a business loan rather than a mortgage? With the asset as security?

[Simpo Two]

One for the business forum I think.

Have an escape plan in case you lose your job. And don't all mortgages use the property as security? If you don't pay, they take the house.

[singlecoil]

torqueofthedevil said:

Would they take into consideration a business plan and the earning potential of the property?

From what I remember of this stuff, business mortgages (which is what you need) require a higher deposit on average than residential.

[Eric Mc]

torqueofthedevil said:

I intend to one day buy a house with some land and open a b&b. Depending on what my finances are like I would imagine I would have to take out a larger mortgage than they would usually lend. (supposing I kept my job and OH ran the b&b).

Would they take into consideration a business plan and the earning potential of the property?

Would you be buying pre-existing B&B property or would you be buying a house, converting it and geting all the requisite planning permissions (which are not always forthcoming).

And be aware of the Capital Gains Tax rules regarding the sale of businesses.

[AndyHSPL]

As an average rule of thumb commercial mortgages require a 50% deposit. As said it would depend entirely on weather it was a B&B (which will be classed as a commercial property) you were buying or converting a house.

I got into kind of the opposite of this when I tried to buy a B&B to convert back to a home. Had a personal mortgage all set up but they would not finalise on this particular property until it was classed as a residential. The council were more than happy to change it back to a residential property but would not do so until the mortgage was finalised so we ended up in a stalemate. Alas that one wasn't to be...

[Jasandjules]

Simpo Two said:

And don't all mortgages use the property as security? If you don't pay, they take the house.

Yes but I meant a business mortgage/loan rather than a personal mortgage needed...... I can see I wasn't that clear there though.....