Second time buyer - commercial / residential property

[LadyGil]

Hello All

I'm looking for some solid advice. I am a second-time buyer ( own my own property in a different county) My Partner has no previous mortgage however I understand since we will be going for a joint mortgage we are considered second-time buyers.

We would like to buy a property that was previously a commercial business, however, has since ceased trading. This property is owned by a family member i.e my partner family so we would be purchasing it for below the present market value.

The initial plan would be to use this as a residential property as it has living quarters upstairs. We have no immediate plan to open a new business and are really looking to bridge the gap in terms of having a residential home in two counties. I work in one county three days a week while he is permanently based in this other country.

Our question is - would this type of mortgage/purchase be considered by the banks giving that the property was registered as commercial property?

We have a 15% deposit however I also believe that as it is a second-time purchase we require 20%. Is this correct?

Applicant 1 salary: 70,000 ( public servant)
Applicant 2 salary: 35,000 (self employed)

Below are some details of the current mortgage my home:

Remaining balance: 149,741.
Remaining years: 21 yrs
Mortgage Type: Tracker 1.10%

Other Debts:

Car loan of 8,000
Current Repayments: 185 per month


Our main concern/query is the fact that is was, a commercial property. Would this have an effect of any mortgage application?

Thanks in advance and appreciate any guidance offered.

 

[RedOnion]

Unfortunately, since you want to keep the existing house, the banks would normally look at the 2nd as an investment mortgage. There might be cases where they would treat differently, but I understand they will say you can only have 1 PPR at a time.

Re status of property, you should get planning permission for change of use to residential, if that's what you need, before you buy. Banks might ask for qoutes for any immediate work needed to convert to residential.

You haven't mentioned cost of new property, or value of existing house, so can't comment on financials.

 

[Leo]

As above, a lot will be determined by the planning granted for the property you're looking at. If the residential element is not compliant, no bank will touch this. If planning is in order, and if there is scope to let the commercial element (business type can be changed via planning process if required), they may look on this more favourably.

Are rates an issue on the commercial element?

 

[LadyGil]

Thanks for all this valuable feedback. I hadn't thought of an investment mortgage.

We would hope to purchase it for approx 150, 000 - The value of the existing property is 180, 000.

Rate are paid and update as far as I'm aware. Is it a complex process to convert from commercial property to residential?

Thanks in advance

 

[Leo]

Is it a complex process to convert from commercial property to residential?

It's very hard to say in general as it will depend on the specifics of the property, the nature of development in the area and development plan. A one off building in a rural or suburban situation would have a much better chance than one in a well developed commercial area with little residential property.