Ever thought about buying a pub? Maybe you’ve wanted to, but you were unsure how to fund it.
If this sounds familiar, then this blog is for you.
In this blog, we’re going to look at how you can get a mortgage to buy a pub, so you can start your next business opportunity.
What is a pub mortgage?
Essentially, it’s a mortgage that allows you to buy or refinance a pub.
They are known as commercial mortgages, and they are focused on helping you buy/refinance properties used for business purposes.
Can I get a mortgage to purchase a pub?
Technically, anyone can access these solutions if they are looking to start or expand a business, including buying a pub. However, commercial mortgages can be more complex to arrange than standard mortgages, so the criteria may be stricter.
Lenders will look at a range of factors to determine whether you can borrow from them and what interest rates you might be eligible for. This can include:
- Your credit history;
- Size of your deposit;
- The amount of experience you have in the sector; and
- The trading history of the pub.
Provided you meet the lender’s criteria; you should be able to borrow the funds needed for your purchase.
How does a mortgage for a pub work?
Commercial mortgages work in a similar way to other finance options.
Essentially, when you take out the loan you will agree on a set repayment term with your lender. Once agreed each month you will need to pay a certain amount back until the term is finished, and the loan is repaid in full.
There can be differences depending on what type of product you selected. For example, if you got an interest only commercial mortgage, each month you will only pay back the interest charges.
With a capital repayment product however, you will repay some of the loan and the interest charges back each month.
Usually, these loans are secured against another property or a piece of land you own. This means that if you were to default on your repayments the property or land could be repossessed.
How do I get a mortgage on a pub?
Getting these solutions is achieved in the same way as conventional mortgages, by speaking to a lender or broker.
Step 1 - First off, you will need to submit an enquiry to the provider you have selected and give them some quick details on the pub and the loan size you are looking for.
Step 2 - Next, they will find the best options they have available for your specific situation and will give you the details you need to make an informed decision.
Step 3 - Finally, (if you’re happy with the loan) the provider can get started on arranging your funds, so you can complete the purchase.
It’s worth noting that commercial mortgages are often considered to be a more specialist area of the market, so many high street lenders may not deal with these types of transactions.
Due to this, you may need to find a specialist mortgage broker (like us) or lender to help you.
Summary
To sum up, it is entirely possible to get a mortgage to buy a pub. Criteria may however be stricter, since it is a specialist type of purchase. Getting these solutions can be achieved by reaching out to a lender or broker, but you may need to consult a specialist provider due to the complex nature of these properties.
Any property used as security, which may include your home, may be repossessed if you do not keep up repayments on your mortgage.
