Can you get a mortgage on a park home?

Can You Get A Park Home Mortgage?


Posted by Justin Allitt in Buying a Park Home, Park Homes, April 4, 2016

When it comes to buying a park home, you may be thinking about looking for help with sourcing the full amount of capital.  Not everyone can buy a park home outright!  This has led to many people wondering whether or not they can take out something as flexible as a park home mortgage.  After all, if you can buy a mortgage for a traditional property, surely the same applies to park homes!

Unfortunately, things are a little more complex than that.  The way you buy and obtain credit on traditional homes can differ a lot compared to park home processes.  If you’re interested in buying a park home, lodge or static caravan, it’s important you look closely at the facts!

Here at Sell My Group, we help thousands of people to navigate the park home markets.  Buying a park home is very exciting!  However, it can also be confusing if you’re unsure what to look for.  Read on for more information on the truth behind park home mortgages – and do read our further guides to learn more about buying, owning and even selling park property.

Are Park Home Mortgages Possible?

The short answer, unfortunately, is no.  There is sadly no such thing as a park home mortgage!  However, that doesn’t mean there won’t be ways for you to finance a park property such as a lodge or mobile home.  However, before we delve deeper into what you can do to finance a park home, let’s look at why a mortgage is impossible.

Mortgages will only ever apply to properties that come with land.  These are bricks-and-mortar homes which have plots registered with the UK Land Registry.  If they have registry of land and any properties on top, then you can legally take out a mortgage.  If your property isn’t recognised by the registry, then you will need to look alternative financing options.

Therefore, this applies to park homes.  There is no such thing as a park home mortgage, but there is park home finance.  This means that, even though you can’t secure anything such as a mortgage loan, there are companies out there who can help you.

However, there are exceptions to the rule – read on to find out more.

What About Brick-Built Holiday Homes?

An exception to the rule could be a brick-built holiday home.  While you cannot secure mortgages on park properties, lodges or static caravans, if your holiday home is made out of brick, you might have a chance.

What you will need to do is check the UK Land Registry’s list of properties.  In rare cases, you may find that holiday properties may actually list on their database.  It’s not a guarantee, however, so do make sure that you adhere to the rules and regulations above.

In any case, providing you buy the land as well as the property, you can take out a mortgage.  When you buy a park home, you are not buying the land – you are leasing it.

What Does Leasing Land Mean?

Land leasing means that you are only paying to ‘borrow’ land from your park site owner.  That’s because the land is still legally theirs.  As part of a park home contract or buying agreement, you will pay for your lease over a given amount of time.  This means that you can legally live there. 

What it doesn’t mean, however, is that you can secure a mortgage.  The lease for your home’s land can vary.  It’s important that you take a look at these details when you first sign for a park home, as you will need to know how much to pay overall.  What’s more, the length of your lease is just one thing a finance company might want to know.

With that in mind – can you find specialist park home finance?  Absolutely – but again, there are a few things you should consider before going ahead and signing any deals.

What is Specialist Park Home Finance?

Though you can’t get a park home mortgage, you can still apply for finance.  This means you should approach a specialist company, such as Pegasus Finance, who can help pay towards your home.  Ultimately, that means you still get a little money taken off the sale price!  In fact, you could get up to 80% in finance or credit from some lenders.

However, rates will vary.  When you apply for credit for any kind of asset, you will need to take into account interest rates, for example.  With specialist finance, each case differs from person to person.  That’s because a financier will need to look at your circumstances, as well as the park home you want to buy!

All companies offering finance for park homes will receive regulation from the Financial Services Authority.  It is crucial you check this before you enter into any deals!  Companies could offer you finance of up to 25 years; however, you may need to agree to a guarantee deal.  You could even benefit from fixed interest rates.  Again, however, this will vary from company to company, and your own circumstances.

What Sort of Things Do Finance Companies Look For?

All financiers will consider your personal circumstances.  This includes any disposable income you have right now, as well as any savings.  They will also consider your income and may even request details on your park home.

In fact, it is a good idea to prepare for your finance company to ask for park home information.  Some of the details they ask for will include the size of your property and how much it costs.  They will also ask how long the lease you are buying will last for.  This is important when it comes to building your perfect package.

It’s important to compare and contrast different deals with various companies.  One package company A offers may not be as affordable as that which company B offers!  Therefore, do be willing to shop around, and to keep an open mind.

Will I Definitely Find Financing for a Park Home?

Unfortunately, there is never a guarantee that you will receive financing for a park home.  That’s because companies need to take into account various factors and circumstances that are unique to you.  As well as your current circumstances, a financier or company may also need to run a credit check.  They may ask you to provide a credit report yourself.  Don’t worry!  This is easy to do, but you may have to pay for it.

A credit check is not always necessary when it comes to park home financing; however, it is something you need to expect.  Credit checks give companies confidence when it comes to dealing with new clients.  They want to see that you have been able to pay back credit in the past!  Therefore, actually taking out a credit card, providing you pay it off in full, could help your case.

However, it’s important you look for credit advice.  Before you even start applying for park home finance, you should look up your own credit score and report.  There are many ways you can do this for free, but for full reports, a fee may be necessary.

What Happens If I Can’t Get Financing?

Don’t lose hope.  If a finance company decides that you can’t get a deal or package on your park home, you still have other avenues.  You can either take steps to improve your credit score, or you could look at alternative properties.

You might even want to look at other companies offering finance!  However, be careful doing this if a company rejects you for bad credit.  Applying for credit again and again in these circumstances can actually make your situation, and score, worse.  These are all very careful things you have to bear in mind!

While a park home mortgage is impossible, there are more than a few ways you can find the money for your perfect property.

Should I Just Save Money?

Believe it or not, many people save money for retirement for this very reason.  Park properties are, by and large, more affordable than outright pricing for traditional homes.  Therefore, plenty of people who love the idea of the park lifestyle will save for their perfect plot of land.

However, this means you will have to save thousands of pounds over your lifetime.  That’s not always easy!  Finance options exist because many people prefer to buy credit and split the cost.  However, if you’d prefer to make sure you own a park home outright, saving up is a very appealing prospect.

Conclusion

Just because you can’t get a park home mortgage doesn’t mean you’ll ever be able to buy your own ideal home.  Take a look at our further guides to buying a park home to learn more!  Sell My Group wants to help you find that perfect plot of land.  Who knows – with the right finance company, the right property for you might be just around the corner.  Don’t lose faith – and start searching for a park home that you can retire to in peace.

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