Is the home you want a risky type?



We talk a lot about making yourself ‘mortgage ready’ in order to give you a better chance of securing a mortgage deal. But it isn’t just you the lenders will be looking at when considering your mortgage application; it will also be the property you want to purchase.

Some types of properties are considered riskier than others which make lenders more cautious about offering mortgages on. Here are some examples:

Renovations

Whilst very popular with those looking to buy cheap and sell high they are not the easiest to get a mortgage on. The main reason they are considered risky is the fact that most renovation properties are left unoccupied a lot when major work is happening.

Homes of non-traditional construction

Certain types of homes are more likely to be classed as ‘unusual construction’ .These include building types such as concrete, pre-fabricated, glass, timber frame etc.A building that isn’t made of brick or stone is usually classed as ‘non-traditional’ construction.

Listed buildings

These types of heritage properties are often positioned in prime locations as they were usually built many years before modern housing developments. Whilst full of period features and rustic charm they are subject to restrictive regulations when it comes to repairs and renovations. And being older properties there will probably be lots of repairs needed along the way. If you plan to do any work to a listed property you will need to apply for consent from the local authority; even for something as simple as putting up a satellite dish.

Lenders want to know a property is good security for the mortgage so they are able to resell it easily if forced to repossess because you don’t keep up repayments. Because listed buildings are more prone to repairs and have a limited market, lenders tend to be very cautious before agreeing mortgages on them.

Homes located near water

If you are planning to move to the seaside and the property is on the seafront lenders will be concerned about coastal erosion, this will be factored into their lending decision. Anyone hoping to buy a home with any waterfront location such as a lake or river should also check the flood risks and ensure you can get insurance against this.

Brownfield sites

Lenders will be wary of homes that sit on former industrial land. You may need to ask your solicitor to check that the area has been decontaminated properly in order to secure a mortgage, if it has it shouldn’t be a problem.

Thatched cottages

Thatched houses are amongst the most beautiful of properties but are usually a lot more expensive to maintain and repair than standard houses. They also have a much higher risk of fire, so mainstream lenders are generally more cautious.

If you need any help or advice on purchasing any property that could be viewed as ‘risky’ by lenders please give us a call and we will be able to advise you.

Your home may be repossessed if you do not keep up repayments on your mortgage.