Home Business Mortgages

Often, when we work from home, our house will have a dual purpose, as both a business premises, and a personal residence, so how does this affect our mortgage?

The simple answer is that, in most cases, it won’t.

Although we may need to notify our insurers, simply working from home is not something that mortgage companies generally need to be aware of.

The implications for buying a house will depend on its current usage at the time of purchase, as well as the level of business undertaken there.

If, for example, we buy a house with extensive outbuildings, as long as they are not currently used for business, then we will simply need a standard domestic mortgage. What we do to the buildings after that, is not relevant, until we come to sell or re finance the property. If, however, they have already been converted, say to offices, or a small retail unit, we would normally need a specialist mortgage, with dual residential / commercial usage.

This does not apply if the vendor simply ran a business from home. It is only relevant if there have been structural modifications, making the premises partly commercial.

Whilst looking at mortgages, I should just mention that it is common practice for small business owners to extend their mortgage, in order to finance a business venture. This could be for converting / fitting out our new office premises, or it could be for anything from web site design / production to recruiting new staff etc. As long as we can prove that some of the mortgage relates to our business, we can claim 100% of the mortgage interest relating to that proportion of the loan. This is something that often gets missed when completing our tax returns.