Flats above commercial premises can be attractive opportunities for landlords and property investors.
But getting a mortgage accepted on these properties may not always be the easiest thing to do.
In this blog, we’re going to explain whether you can get a mortgage on a property above a shop and how you might go about it...
Can you get a mortgage on a property above a shop?
Put simply, yes you can. There are many providers who can help with these transactions, so it is achievable.
In fact, both buy to let mortgages and residential mortgages can be accepted on these types of properties. The key is finding the right broker or lender to use.
Some lenders consider these transactions to be risky and therefore do not accept applications of this type. Due to this, it is important you research your options carefully to locate the right provider.
Why is it hard to get a mortgage on a flat above a shop?
Whilst these properties can be a great investment, there are some complexities that can make getting a mortgage on them more difficult.
One of the biggest reasons is that there can be more disturbances for the residents living in there.
For example, customers could be coming in and out of the shop all day and night, so there could be a lot more noise compared to residential areas. To add to this, depending on what type of shop it is, there could be unpleasant smells.
These factors can make it much harder to sell in the future or can affect the property’s future value.
If you’re looking to get a buy to let mortgage on the property and rent it out, it could be more challenging to find tenants who will accept these disruptions.
Despite this, many specialist lenders and brokers are happy to help in these situations, so there are still options available.
Where can I get a mortgage for flats above a shop?
These solutions can be accessed in the same way as other finance options, by speaking to a lender, bank or a broker.
Some mainstream mortgage providers are happy to help with these transactions, however not all of them are. For this reason, it could be worth getting the help of a specialist lender or broker, as they are more equipped to handle complex transactions and circumstances.
Deciding whether to go directly to a lender or to use a broker is up to you. It may depend on how much time you have available to research and how much advice you feel you need.
Going directly to a lender can be positive, as it cuts out the need for a middleman and means there are no broker fees on top. However, it does mean you are limited to their products, so you may not get the best option available for your needs.
The benefit of speaking with a mortgage broker is that you get access to a range of different lenders and products. This means you may be able to get a more competitive solution, as they will be able to compare a few different options for you.
Summary
To summarise, getting a mortgage on a flat above a shop is entirely possible. However, it can be more complicated than other types of transactions, so not all lenders may be willing to help in this scenario. Despite this, there are still several options open to you, particularly if you consult a specialist broker or lender.
Any property used as security, which may include your home, may be repossessed if you do not keep up repayments on your mortgage.
