What is a Semi Commercial Mortgage
A semi commercial mortgage features aspect of both residential and commercial mortgages. It’s not the most common type of mortgage due to the unique circumstances a property requires to quality for a semi commercial mortgage.
To qualify for this type of loan, a property needs to be both residential and commercial. This typically comes in the shape of a small business that has a commercial area on the ground floor and a residential area above the business.
Because on part of the property is used commercial while the other is used as a personal residence, a semi commercial mortgage can be arranged to accommodate the unique circumstances. Common examples of a property with semi commercial elements would be a pub or shop on the ground floor and a flat on the top floor.
Loan amounts are similar to commercial mortgages, typically falling between 60% and 75% of property value, while lenders calculate the criteria of the loan in the same manner as a commercial mortgage, basing it around the accounts, profits, and business plan of the borrower.
Some lenders provide 100% semi commercial mortgages, although you do require a form of additional security, which is most typically owning another property. Many businesses looking to expand use this to their advantage, especially when renting the property to residents.
In fact, a semi commercial mortgage is treated as a type of commercial mortgage by lenders, meaning you need to seek out a commercial mortgage financier to acquire such a loan.