Introduction

Park homes can be comfortable and offer the prospective owner a less stressful and cheaper lifestyle in a beautiful location. Park communities, where these houses are located, often provide a tranquil environment for retirees and those who prefer a slower pace of life. However, if you’re considering purchasing a freehold park home, you may wonder: Is it possible to get housing credit to finance it? The complexity of the answer to this question depends on several factors.

Implications of Freehold Park Home

First, it is necessary to find out what a freehold park home is.  Park homes are mobile homes with transportable structures, usually in private parks or similar residential zones. It is important to note that many park homes are sold on a ‘leasehold’ basis whereby, although you own the home itself, you are actually ‘leasing’ the land it occupies. Still, a freehold park home refers to the situation whereby you own both the home and the land. This distinction plays a crucial role in determining the types of funding available for your business venture.

Why is it challenging to incorporate park homes into mortgages?

Lenders are often hesitant to offer mortgages for park homes, including those with freehold ownership, for the following reasons:

Non-Standard Construction: 

Built structures like park homes are usually less conventional than concrete-based houses. Therefore, as illustrated below, they might not satisfy the lender’s most stringent requirements.

 

 

Depreciation Concerns: 

Unlike conventional homes, park homes lose value over time, much like cars. This implies that park homes become less secure lending assets than other forms of security.

 

 

Limited Market: 

The market for second-hand park homes may not be as broad as the market for other types of dwellings—this means there is an extra risk for the lender in the case of repossession.

 

 

Planning Restrictions: 

Most park homes are located in areas where the legal regulation of occupancy either prohibits the right of residential park home occupiers to live or establishes specific conditions for residence.

Such factors may complicate financing. As mentioned above, these limitations, in turn, make funding more complicated.

 

Freehold Park Home: Can You Get a Mortgage?

Despite the challenges, securing a mortgage on a freehold park home is not impossible. Several identified or specific market lenders may be willing to offer the financing, especially if the property meets several conditions. Key considerations include:

 

 

Construction Standards: 

A mortgage will likely be offered if the park home is built to a permanent residential standard, such as British standard 3632.

 

 

Freehold Ownership: 

Freehold status is beneficial here, as owning the land removes some of the risks of leasehold park homes.

 

 

Personal Financial Circumstances: 

To qualify for the loans, you must bring some pictures and be ready for a _UTILITE_ check of your creditworthiness, income, and other characteristics.

 

 

Lender Policies: 

Certain smaller lenders, building societies, and specialist parks and leisure financial entities possess a slightly more significant understanding of park homes, which may enable them to offer more tailored financing solutions.

 

 

Alternative Financing Options

If obtaining a traditional mortgage proves difficult, consider these alternatives:

Personal Loans: 

Depending on the cost of the park home and your credit rating, a personal loan may be a viable form of financing. Still, these often have high interest rates and short loan durations.

 

 

Equity Release: 

Older people purchasing a property can benefit from the funds required to buy a park home by converting the equity into the original house.

 

 

Specialist Lenders: 

Currently, there are firms accredited to finance park homes, and while these options are available, they have always been considered costly compared to standard loans.

 

 

Savings and Investments: 

Using the saved money or even selling an investment is not quite as complicated as acquiring credit to purchase the asset.

 

 

What Needs to Be Considered When Purchasing a Freehold Park Home?

Park Rules and Regulations: 

Always find out the rules governing the park community by prohibiting certain changes or inhabiting the park in specific ways.

 

 

Resale Value: 

Remember that the car may depreciate, and its resale value is not as commanding as new vehicles.

 

 

Maintenance: 

While freehold tenure does not require ground rent, compound maintenance and other fees are required.

 

 

Location and Amenities: 

Consider the park’s location and the features available to determine whether they fit your lifestyle.

 

 

Conclusion

As with most park homes, obtaining a mortgage on a freehold property can be challenging, but it is achievable, mainly if the house is well-built and you work with a specific mortgage lender. However, it’s essential to consider the necessary precautions and weigh the pros and cons of owning a park home, especially when considering funding sources. This knowledge means that if you’re considering park homes, you can look at all available avenues and choose a course appropriate to your budget and desired way of life.

 

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