THE E4M BLOG

flat above a shop? - we can help you find a mortgage
09 FEB '19
“MY EDINBURGH FLAT IS STYLISH, CENTRALLY LOCATED, GREAT CITY VIEWS – HOW COULD A LENDER REFUSE ME??”BY ADMIN

Nicola owns a presentable top floor 2 bed flat with impressive views across Edinburgh. Being close to The Meadows, and not too far from Princes Street, it’s been the perfect home for enjoying green spaces and getting to work, which is just a short walk each morning. But when Nicola came to remortgage, the shops located at ground level created a sticking-point she hadn’t anticipated

“WHAT HAD CHANGED SINCE I BOUGHT THE PROPERTY?”
Nicola was coming to the end of a 2 year fixed rate with her current lender. She found that the new deal options they offered her were unimpressive when comparing with other products on internet comparison sites, and decided to remortgage to get a better deal. “I found a really good 5 year fixed rate with a different lender and contacted them by telephone to apply. After the first conversation, which lasted 50 minutes, I was informed that my financial position made me a viable applicant. I submitted the required documents during the following days, but during the second telephone interview I was told that they didn’t accept applications for flats located above shops. I couldn’t believe it – an utter waste of time; and why was this suddenly a problem for me? When I bought the property my current lender didn’t express any concern with the flat being above a shop.”

WHAT WAS NICOLA’S CHALLENGE?
Not all lenders accept flats that are above commercial premises because they perceive a risk that business activities below could affect future value or marketability. Excessive noise, unpleasant smells, and pedestrian activity are on the list of concerns that lenders have, and as a result they may have a blanket policy of not accepting these properties as “security” for a loan. Nicola’s current lender did indeed allow the mortgage when she bought the property 2 years ago, but it was by pure coincidence that, at that time, they didn’t have any strict policies on flats above shops

STUCK
“I felt stuck. My current lender was offering a new deal that was uncompetitive, and I was about to transfer to their much higher Standard Variable Rate. At this point I decided to contact Experts 4 Mortgages, who popped up on Google maps, close to where I work in the centre of town”

HOW DID WE HELP NICOLA?
We know lenders who take a more accommodating position on flats above commercial premises. Some lenders will accept properties that fulfil certain pre-conditions, such as the property meeting a minimum valuation, or the commercial premises below excluding the presence of A4 and A5 business types (fast food and drinking establishments). Some lenders take an even more flexible approach, with their lending decision subject to “positive comments” from their valuation surveyor. We soon had a shortlist of lender prospects for Nicola

WHAT HAPPENED?
We found a lender who was interested in Nicola’s case because they took a flexible approach with flats located in what they considered to be a marketable part of Edinburgh. On making an application we took advantage of a deal that included a free valuation, so Nicola wasn’t exposed to the risk of losing a valuation fee. The valuation came back as required, and Nicola got a 5 year fixed rate that she was happy with. “This was my first remortgage, and I really wasn’t expecting it to be the minefield that it apparently is. I work in the financial services industry, so I know the principles behind mortgage lending, and I was certain I didn’t need any help getting a mortgage. Ironically, I did!”

CAN WE HELP YOU?
We can’t guarantee that we can help you, because each case has different wider circumstances, and lenders change their lending policies over time. However, if you think you are in a similar situation we can, at the very least, increase your chances of success

IS NICOLA REAL?
We've changed her name and some of the soft details surrounding this case to protect her identity, but the fundamentals of his case are real, and we have dealt with numerous similar cases in the past

WE FEATURE BLOG POSTS TO ENRICH THE CONTENT AND INTEREST IN OUR WEBSITE. THE ABOVE, AND POSTS LIKE IT, DO NOT CONSTITUTE ADVICE, AND THE ACCURACY OF ANY INFORMATION WITHIN IS NOT GUARANTEED. OUR CLIENT CASEBOOK POSTS ARE A USEFUL WAY TO ILLUSTRATE HOW WE MAY BE ABLE TO HELP CLIENTS FACING MORE COMPLEX CIRCUMSTANCES. THIS DOESN'T NECESSARILY MEAN WE WOULD BE ABLE TO ASSIST YOU WITH YOUR GOALS, BECAUSE YOUR WIDER CIRCUMSTANCES MAY BE DIFFERENT, AND LENDERS' CRITERIA CAN CHANGE OVER TIME

Typically, we do not charge a fee for arranging a mortgage, however the actual fee will depend on your circumstances and will not exceed £395. Experts 4 Mortgages is an Appointed Representative of Stonebridge Mortgage Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority. Proprietor: Daniel McLardy

 

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