Semi-Commercial and Buy to Let Mortgages

There is a still a reduced range of residential Buy to Let mortgages available but things are slowly improving, but what about commercial or semi-commercial investment mortgages?

Even though residential and commercial properties struggle to hold their values they continue to be an exciting and profitable way for people to increase their asset base and prepare for the future.

So what counts as a commercial or semi-commercial property?

Well, the short answer is anything which is not almost entirely residential.  In 2004 the law changed to define exactly what a residential mortgage would cover, leaving everything else outside the FSA’s regulation.

In practice the definition can be slightly grey, the list is long but some examples are:

• Factories
  

  

• Offices
• Shops, Pubs, Restaurants etc.
• Shops with accommodation above.
• Accommodation with offices above.
• Flats over fast food outlets.

Higher yields and more stable incomes mean that more people than ever are now turning to Commercial Investment Properties to add value to their portfolios – this means that the choice of Commercial investment mortgages is growing.

There are a number of special considerations when dealing with commercial investment property.  The main factors are the length of the lease, its associated income and the quality of the tenant.  If you are considering purchasing a Commercial or Semi commercial investment property then using a broker will ensure that you find the most suitable investment mortgage.

Residential Buy to Let Mortgages

Buy to let mortgages are for residential properties when your intention is to rent out the property. The amount you can borrow is usually dictated by:

• the anticipated rental income, normally calculated as a ratio.
• A calculation based on your income (full status or self-cert).
• or a combination of the options above.

Up until recently, you could easily get a buy to let mortgage, even if you have a poor credit history.  However, the situation is now slightly more complex.  The size of deposit has increased and the general lending criteria are all much stricter.

More reason to use a specialist broker to help if you think you may encounter problems.  A large deposit, stable income and other assets will basically give you a wide range of choices when it comes to obtaining a semi-commercial or buy to let mortgage.