Mortgages for Guest Houses

In some cases, you will need to get a specific type of mortgage to buy a guest house, called a commercial mortgage. This is a mortgage which is designed for property that will be used as a business asset rather than as a private residence, and allows you to buy a property for the specific purpose of using it as a bed and breakfast.

You may find it easier to get a guest house mortgage if you can demonstrate:

• A high deposit – this reduces your risk as a borrower in the eyes of the mortgage lender
• A business plan – if you are starting up a new guest house business, you may need a 12 month cash flow forecast and projected accounts for next 12 months together with a detailed business plan
• Up to date accounts – you may need up to three years’ worth of accounts if you are buying an existing guest house or  looking to get a remortgage
• Business acumen – proof of experience of running a successful business may count in your favour
• Good credit history – no outstanding County Court Judgments (CCJs) or bankruptcy to your name