Buying your first home is exciting but it’s important to be smart with your investment to ensure it’s as easy as possible to get a mortgage.
One of the things that could make things slightly more complicated is the sort of house you buy.
Some properties are seen as a bit riskier than the norm due to the potential for repairs, security issues and the type of deal you need to enter into to buy them.
Mortgage lenders have to weigh all this up, as well as you’re ability to make repayments, before offering you a mortgage.
Here are some of the great properties you may want to make your home and the risks lenders will have to consider.
- Grade 1 listed buildings
These homes, whilst beautiful, could need quite a few repairs along the way. Consequently, mainstream lenders are more cautious before agreeing mortgages on them in case they end up causing you expense that you hadn’t planned for.
Conversion properties are really popular at the moment but they’re not always the easiest to get a mortgage on. This is because there’s a chance you’ll be paying your mortgage for a while without living in the house, which isn’t something lenders are always comfortable with due to the risk associated with an unoccupied home. Depending on the property, you might need to get a specialist lender involved.
- New builds
While lenders don’t consider new builds to be risky, they do often value them lower than the price asked for by the developer. Consequently, you might have to put down a considerably larger deposit than planned. Plan for this and try to negotiate with the developers as they often offer special deals that can make up the difference.
- Thatched properties
Thatched houses are amongst the most beautiful and characterful of properties but are usually much more costly to maintain and repair than standard houses. They also have a higher than usual risk of fire, so mainstream lenders are generally more cautious.
- Homes near water
If you are after a property with an attractive waterfront location then make sure you plan for higher insurance bills associated with the higher flood risks. If your home is by the sea, then lenders may also be concerned about coastal erosion and will factor this in to their lending decision.
- High rise flats
Tower block homes can be a challenge for mortgage lenders, especially in ex-council flats when some of the other flats could still be managed by local authorities.
- Brownfield sites
If your home sits on former industrial land, lenders could be wary of contamination. You may need to get your solicitor to check that the area has been properly decontaminated to secure a mortgage but once you’ve done this it should be relatively simple.
- Short leaseholds
Not a lot of people realise that flats are sold on leasehold. Essentially, this means you only own it for a certain number of years. The good news, is that most leaseholds are really long but you always need to check because if it’s 80-years or less you could struggle to get the mortgage. If the lease period is below 80 years then talk to the seller and see if you can extend the leasehold before you put down a deposit.
- Any property that isn’t bricks and mortar
Often referred to as ‘homes of usual construction’, properties made out of anything other than bricks and mortar (such as wattle, concrete and timber frames) can prompt lenders to be more cautious before offering you a mortgage. This is because of issues relating to health and safety, such as asbestos risk. However, as these buildings become more popular, attitudes are likely to change.
Think before you buy
Getting approved for a mortgage boils down to thinking carefully about the nature of your investment and ensuring you’re financially fit enough to take it on.
If you do this, you should avoid some of the common mistakes made by buyers, such as buying the wrong type of property.
Further useful information can be found on the Just Remortgage website. Just Remortgage can help you through the process of buying a home; they offer impartial advice, help moving house, and information on the different types of mortgages available, including those suitable for first-time buyers. This means you can find the one that’s right for you.