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Mortgage next to commercial property

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Feb 6, 2023

Can you get a mortgage on a residential property next to a commercial property? Here are your options…

A mortgage is available if you want to purchase a property located above or near commercial properties. The process will not be as simple if you buy in a residential area, so your options for mortgage lenders may be restricted.

This comprehensive guide will tell you everything you need to know to get a mortgage to purchase this type of property near commercial premises.

It also explains why there are fewer options and the eligibility criteria you must meet for the mortgage lenders who will accept your mortgage application.

We have a few mortgage providers lending mortgages near commercial premises, so start your application below and we can help you:

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Can you get a mortgage for a house next to a commercial property?

A mortgage is possible if you are looking to purchase a flat to live in or to rent out that’s located above or near business premises. These are sometimes referred to as flat above shop mortgages.

This could include a restaurant, bar, cafe, takeaway, shop or public house. The process is not always easy. Mortgage lenders view you as a high-risk borrower, so you have fewer products and mortgage deals available for a mortgage approval with a high street bank.

Click the link below to begin with our mortgage brokers; We can help with any residential property at any property value.

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While some lenders will not consider a mortgage application above or near a commercial property, others will accept them and decide on a case-by-case basis.

In complex mortgages like this, specialist mortgage brokers like ourselves can help you determine which lenders to contact.

Criteria for eligibility

Getting a mortgage approval, you will need to meet the eligibility requirements to ensure you can meet the mortgage repayments. The mortgage lender will consider your age and credit history before offering a mortgage approval.

You may need to make a higher deposit. You can borrow up to 95% loan to value for mortgages on a standard residential mortgage. This means that you will need a deposit of only 5%.

You’ll need to deposit closer to 20% if you buy a property above or near commercial premises.

How a broker can help with your purchase of commercial property near you

It doesn’t matter what property purchase you are going through; it is worth speaking with a mortgage broker. All of our brokers are regulated by the financial conduct authority. We can help with commercial mortgages and residential mortgages.

Our mortgage brokers can find the most suitable lender and mortgage deal with your particular circumstances. A broker is a must if your buying property is located above or near commercial properties.

As mentioned, only specific lenders will lend on these property types. Specialist brokers will be able to tell you which lenders to approach and which ones to avoid, saving both time and money.

They will have connections with lenders’ representatives and can discuss your application and even negotiate for you.

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What lenders are likely to consider your application

As we have already stated, the number of lenders available to you is limited. This type of lending is not available from most mainstream lenders. Some lenders, such as HSBC, Barclays, and Natwest, may be open to your application.

You’re better off choosing a specialist or non-high street lender like Aldermore, Together, or Shawbrook. Based on your particular situation and the property that you are looking to purchase, your broker can identify lenders that may be able to help.

Lenders consider this type of mortgage risky.

The future saleability of the property is what it all boils down to. Lenders want to ensure that the property is saleable in the future before they make lending decisions.

Saying mortgages on homes located above or near commercial properties is more challenging. Potential buyers may be discouraged by concerns about the commercial property’s use, such as noise and smells from cooking or litter.

It may be that the property’s geographical location can make a difference. The property may sell more if it’s located in a city centre with high demand than in a rural area.

A lender will request an independent valuation to help them make a decision. The valuer’s report will include information about similar properties, the local market, and other factors that could affect the property’s resale price.

Speak with an exclusive mortgage expert to be introduced to a specialist lender. When you click the link below, you will meet a specialist broker regulated by the FCA waiting to begin having your mortgage approved.

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Can you get a mortgage to buy to let above or next to commercial property?

These are more difficult to get than residential mortgages and typically require a larger deposit. You should expect to deposit at least 25%.

Lenders want to know the purpose of the commercial property attached and the trades conducted in nearby commercial properties. This will allow them to determine how easily you can rent the property and make your mortgage payments.

Although it is unlikely that you will be able to obtain a mortgage from any mainstream lender, there are specialist lenders who may be able to lend to you.

Match you with a mortgage broker that specialises in complex properties

Although it may not be easy to get a mortgage for a house next to a commercial property, it is possible if you know suitable lenders.

We can help with commercial mortgages and residential mortgages so start your application below and we will help get your mortgage approved with the best rates.

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