Finding it tough to get a mortgage?

A mortgage broker can be of great assistance

As prices continue to rise, particularly in London and the South East, some of the best value properties are those where lenders are less inclined to lend due to concerns around marketability.

Finding it tough to get a mortgage?

Finding it tough to get a mortgage?

There are clearly numerous types of commercial property and the important issue when speaking to a lender is to explain what business is directly below the flat as well as the businesses operating either side.

The most difficult property to mortgage will be those above a restaurant, take away establishment or a dry cleaner. Lenders are generally concerned about the opening hours, noise and smell discharged all of which impact on the marketability of a property.

A further key point will be location; a flat above a dry cleaner in prime central London may be a great deal more appealing to a lender than one located in a regeneration area.

Most lenders are conditioned to say no to these types of property but this is where a mortgage broker can be of great assistance as in some instances a broker can speak to the lender’s surveyor directly so the property can be discussed in detail.

It is worth pointing out that a lender will not always be able to state at the outset whether they will lend or not as it will be down to their valuer’s comments but it is possible to increase the chances of a certain type of property being acceptable by speaking to the right lender.

There are lenders that are much more open to this type of lending than others although a property directly above/next to a food outlet will always be incredibly difficult to mortgage.

NatWest is probably the most flexible lender when looking at property above commercial and will certainly consider the more difficult cases. Nationwide Building Society and Santander would potentially consider a property above a dry cleaners but Barclays/Woolwich would not.

More of the big high street lenders will look to lend where there is no food outlet/dry cleaners nearby, examples being a newsagents, pharmacy and opticians.

Other examples of difficult to mortgage properties are high rise flats – particularly local authority owned. Generally speaking lenders will want to know that the large majority is privately owned. Where this is not the case it is unlikely in the current climate that a lender will lend.

Studio flats can also be awkward, as some lenders will not lend on studio flats – Yorkshire Building Society and those that do tend to insist that the flat is a minimum of 30sqm. For those flats below this, Santander will certainly consider dependent on location.

The key to all of this is to do your research if you’re concerned about the suitability of a property and make sure you discuss with the lender at the very outset. This will potentially avoid a situation where a mortgage is requested on an unacceptable property, saving time and money.

Equity Release on selling your Home Mortgage

Where you sell all or part of your home to a loan provider, in return for a tax-free lump sum or smaller regular payments. Again, you are entitled to live in your property rent-free until you pass on or move into care, but you have to agree to maintain and insure it.

The percentage of your home you retain will always be the same, no matter how the value of the property fluctuates. You can of course take further cash releases, which will affect the size of the portion of your property that you own. At the end of the plan, your property is sold and the sale proceeds are shared according to the final percentages of ownership.

Editorial Note: This content has been independently collected by the EveryInvestor advisor team and is offered on a non-advised basis. EveryInvestor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.
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