Commercial Mortgages: Finance on Retail and Business Premises
Commercial mortgages are available across a wide range of property types from factory units to shops. The determining factor however is that the borrower will not normally be living at the security which makes them unregulated by the FSA.
Mortgages secured on commercial property
With semi-commercial mortgages (such as a shop with a flat above), the borrower will have permission to live in the residential part of the building. Mortgages with a commercial element are currently viewed by the lender as higher risk than those without and as such it is a much lengthier process requiring additional checks, the mortgages available are usually based on a LTV of 75% or below and rates are higher than with other mortgage types.
Many commercial and semi-commercial mortgages allow the borrower to let out the property although an additional premium is usually payable.