What is the difference between a buy to let and a commercial mortgage?
The difference between commercial mortgages and a buy-to-let is that they depend on who will be occupying the premises. If you’re intending to occupy the premises yourself, or with your own business, then you become an owner occupier.
A buy to let mortgage is specifically designed for landlords, or those who want to rent out a property to somebody else. If, for example, you had two companies and wanted to use one company to purchase the asset and then lease it to another, this would be considered a buy-to-let as they are separate entities, however, if it was the same company this would be a standard mortgage.
What type of properties can get a commercial mortgage?
By no means can we give an exhaustive list, as there are endless potential uses for commercial mortgages, or buy-to-let mortgages, but here’s a list of some of the most common properties that we arrange mortgages for.
- Industrial property – These are typically industrial units that tend to be manufacturing or factories
- Shops – Retail premises that usually have shops or retail businesses as tenants
- Hotels – Hotels and B&B’s can also qualify for these types of mortgages as they’re business premises
- Care homes – Care homes that house residents such as older people or those with complex medical needs can qualify for commercial mortgages
- Doctors surgery and medical – Properties that can be used as a doctor’s surgery or medical unit can also qualify for commercial mortgages
Is a commercial buy to let mortgage right for me?
This is a question we can’t answer for you unless we understand your circumstances so our advice, ultimately, would be to get in touch and talk to an experienced broker who can understand in greater detail what your project looks like and advise you accordingly. We’re a brokers that can arrange multiple different types of finance, mortgages and other types of financing for you, including bridging finance if you’re looking for something shorter term.
At the end of the day, our focus is our clients and if we don’t feel that a certain product is right for you then we’ll tell you and recommend something we think suits your needs, so get in touch today.
Can businesses/ companies get a commercial mortgage?
Yes, they can, however, the process is a little different and it would depend on the type of business you are. If, for example, you’re a brand new company with little trading history or accounts then the likelihood is that a lender would expect a directors guarantee or some further security in order to agree the mortgage.
That being said, the process is very similar and if your business or company meets the criteria then, yes, you can be accepted for commercial mortgages.
Can I get a commercial mortgage with bad credit?
Yes, you can, however, it may prove more difficult and a longer process. If you’ve got things like CCJ’s or defaults then it is likely that the lender would ask either for a more detailed business plan or proposal, proof that you’ve got a good track record in commercial property, or they may ask for extra security or a bigger deposit.
Semi commercial mortgages
If the property you’re looking to purchase has both residential and commercial properties within it, then you’ll need to look at a semi commercial mortgage. In practice, they’re not much different to commercial mortgages, however, you need to be specific about what you intend to use the property for, and some are considered inherently riskier.
If, for example, you want to buy a retail premises with flats above it, but it’s next to other retail units this could be considered risky for the fact that an off-licence or something similar may open near your property dropping the value. This is something you’ll need to discuss with a broker.
Speak to our brokers today regarding commercial buy to let mortgages
Again, speaking to a broker is the best advice we can give you as they can then understand your requirements and your project in greater detail, meaning we can give you better advice.
Our team are ready to answer your queries and can help you through every step of the process. We’ve spent years building a friendly and professional team that are here for you.