Ask the experts
About our experts...
At John Charcol, we are constantly asked for advice by borrowers on what they should do when it comes to mortgages. As such, we created this section so that you can submit your questions to our experts. The answers are provided by a number of people who have years of experience in the mortgage market. The team is led by Peter Woodward who spent his formative years as an underwriter with one of the major UK lenders and the last 10 years in our Technical Department along side Ray.
So please do submit your question and we will do all we can to answer it as quickly as possible
Please be aware that these answers can only be generic and no personal recommendations can be made.
Posted on 07/06/2010
We are thinking about buying a newly built commercial property that has not been fitted out & converting this into a self contained residential property. We live in the North East of Scotland & wondered if this is allowed or if there are any restrictions to its intended use?
Categories: Commercial, Special circumstances
Posted on 06/02/2009
Hi
My wife has enduring power of atourney for her mum. Her mum has been moved from her property to a sheltered home as she is suffering alzhimers. Now, the property is a commercial dwelling with a shop and above flat. It has a mortgage of £25000 outstanding. Can she remortgage the property on a buy to let basis to clear the mortgage and rent it out to fund her mums care?
Most lenders will not accept an application where an enduring power of attorney (EPA) is involved. I think this is primarily because they don’t consider it worthwhile setting up a system to deal with such cases. The problem is worse now that many lenders have an online application system because they are even less likely to consider it worthwhile going to the expense of programming their system to be able to cope with what is likely to be a very small number of applications.
In any case as the property consists of a shop and flat above a Buy to Let (BTL) mortgage would not be suitable, assuming the property is on one title. You would either need a commercial mortgage or it may be worth splitting the title so that the shop and flat have separate titles, each with their own lease. This would incur some legal costs and there may be some tax implications and so if you want to consider this you should get specialist legal advice. Purely from the mortgage perspective it may be helpful because a BTL mortgage on just the flat would then be the right type of mortgage.
However, many lenders will not lend on a flat above a shop, depending on what type of shop it is, and this plus the problems because of the EPA, will make it difficult to find a lender. If the only reason a lender declines the application is because of the EPA you may have a case for arguing this contravenes the discrimination legislation but I would first of all try your wife’s and/or your mother’s bank.
Categories: Buy-to-let, Commercial, Remortgaging, Special circumstances
Posted on 30/01/2008
We own a shop and live in the flat above. We have a commercial mortgage. The property is split approx 65% residential to 35% business. Is it possible for us to change from a commercial mortgage to a residential or split it into 2 separate mortgages?
Categories: Commercial, Valuations, Freehold, leases & unusual property
Posted on 07/10/2007
I'm wanting to do property developing full time and have already completed 2 property's in the last 6 years in my spare time as a hobby but I'm wanting to do it full time now. I'm self employed and need to know what sort of mortgage i need to look for as i don't want to re-mortgage my marital home, only the property I'm buying.
Categories: Commercial, Self-build
Posted on 01/10/2007
I am in the process of buying a commercial property which I want to rent out. The purchase price is £281,000.
My home is worth nearly £2million and I have no mortgage on this.
I want to take out a 100% mortgage on the purchase of the commercial property. Can I somehow take this out on my home to benefit from a lower interest rate but somehow align it to the commercial property so I can offset the rental income I receive from the tenants against my mortgage payments for tax purposes?
My salary is approx £80,000.
Categories: Commercial, Remortgaging
Posted on 28/09/2007
I need to borrow £75k to complete on a property costing £720k and I require a further £45k facility to draw down on. The property was a vicarage built in c1870 and currently has D1 commercial offices use. After purchase I shall apply for planning permission to return it to residential use. It is NOT possible to apply for this permission prior to completing on the property.
I am astonished that with the LTV ratio I have that it is proving virtually impossible to obtain this finance. Can you help?
Thanks
James
Categories: Commercial, Self-build, Special circumstances
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not neccessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.