Thanks Zo Zo, I saw some sites saying 20% but with the current climate 25% is probably more likely.
Collin I would want to live above the shop and use the below as a salon. Would I then need 2 mortgages? the property is listed as commercial with a maisonette above but it is priced as a whole unit.
These are the sorts of things one likes to have some idea about before they go embarrassing themselves at the estate agents!
as Zoe has quiet rightly pointed out you must speak with a competent mortgage /pension adviser for definitive up to date viewers and advice on this.
before the credit crunch there were many many ways of raising a mortgage however this may well have changed now.??
I doubt it very much if the Building society would split the morguage..costly,messy and un nesseriy so I suspect one type of mortgage would be offered........If this is a shop downstairs I would guess they would go for a commercial mortgage.
These cost a bit more than a domestic one and the LTV (loan to value)generally speaking peaks lower than a domestic one which generally means more of a deposit would be required....of course the higher the LTV the higher the intrest charges levied.
Now if the downstairs was rented to someone else you could actually fund the purchase via a pension scheme which is a nifty way of doing it...even if you are looking to use the shop yourself a BS might still accept a pension funded route provided there existed a proper rental lease agreement.
This is a great way as if you have an existing pension with funds in it as you wont need a deposit..if not they simply set you up with a new pension...a good tax efficient way of funding as you would get a double wammy tax break..on the pension fund as well as the mortguage repaymenst which would be offset directly against your P&L account.......they/you can only do this on commercial mortgages though.
Times might have changed since the credit crunch however you could go for a "non status" mortgage whereby the BS has no interest in your earnings capability and simply offers a mortgage based on the value of the property...generally speaking the LTV is no more than 70% (this might be slightly higher for London???)..again the intrest charge levie does tend to be a little higher than other mortguage options.
i would suggest you take an interest only mortgage out initially..this way the repayments are lower than a capital repayment mortgage route and allows you to get on your feet what with funding a new salon and all....you can after a couple of years convert this to a capital repayment mortgage when times are better for you and when any possible penalty clauses have expired.
Either way..take advice,shop around,ask what"special" deals /methods there are as a way of funding the purchase of the property...a lot of lenders dont advertise "unusual" ways of raising capital but most do do it...so dont be afraid to ask.
Be careful as property prices are continuing to drop so dont get yourself into a negative equity position...it could be better to wait another 6 months as prices may have dropped further and sellers more willing to enter into a deal as they become more desperate to sell.
Either way..well done you for thinking of this big project at this time :hug:
HTH
PS I think we should call you "Mrs BIG" from now on for thinking so posativley about this BIG step you are considering..well done again
Collin
xxx
