Non-Standard Construction Mortgage

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Non-Standard Construction Mortgage

Non-Standard Construction Mortgage


Xavier Collin joins us to explain how the mortgage process works for non-standard construction properties.

What is a non-standard construction mortgage and how do you identify non-standard construction?

The term non-standard construction can cover a wide range of property types, including listed buildings, prefabricated steel buildings, concrete structures and those with thatched roofing.

Essentially, non-standard construction means that it’s not made with usual building methods. Anything that’s not the norm today would be classed as non-standard construction. Every lender is different in how they look at properties. Some lenders might class a property as non-standard, whereas another might not.

Typically it would be a property that’s not built with the standard cavity wall insulation that’s used in most homes today.

What is a prefabricated house?

They’re commonly referred to as prefabs. A prefabricated house is manufactured in a factory and then delivered to the building site for assembly, instead of being constructed from scratch on site.

There are three main types of prefabricated homes. ‘Manufactured’ means it’s built in sections and pieced together on site by professionals and heavy machinery. The second one is ‘Kit,’ which is essentially delivered flat-packed and assembled at the site. It’s modular and can be customised. The foundations are not removable – you can’t move them around, but the rest of the structure can be moved and adapted.

Lastly there are ‘Modular’ homes, again built off site, but in self-contained units. They’re transported to the site to be constructed. There isn’t too much difference between these three types. Prefabricated just means all the parts are initially built in a separate location and transported to the building site.

How difficult is it to mortgage a non-standard construction property?

Some are a lot easier to mortgage than others.
They can be more difficult to mortgage than properties of standard construction, but really it comes down to the lender’s criteria and how the property is built.

There are so many different property types like concrete builds, timber framed houses, steel framed houses and barn conversions. It really comes down to the lender, as each one will have a different risk appetite and criteria. So there isn’t really a set answer around the ease of getting a mortgage.

Some of them might be perfectly fine. Just check with your mortgage advisor, give them all the details and they can check it over with lenders first.

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We can advise how much you can borrow, find the most suitable lender and have that Decision in Principle in place. Then, when you do make an offer on a property, you’re ready to go.

Can you get a Buy to Let mortgage on non-standard construction?

Yes, you certainly can. It works in a pretty similar way to a normal residential mortgage, for a home you’re going to live in. Again, every lender has different requirements depending on the type of build, depending on the risk appetite. They may require a higher deposit or they might have criteria around warranties they want to have in place.

You can get Buy to Let mortgages on them. The right thing would be to speak to your advisor and they can check it all over, as the criteria may vary from lender to lender depending on the specific type of build.

What costs are involved with non-standard construction mortgages?

The costs are very similar to properties of standard construction, but again, may vary slightly from lender to lender. You’ve got standard application fees and legal fees, and valuation fees may be slightly higher for some types of properties.

There may be additional survey fees to think about. If a property is quite quirky you might want to get an additional survey – it’s completely up to you. It’s not mandatory, but it’s something people might choose to do if a property is non-standard construction, just to check the foundations and ensure the property is fully safe and isn’t going to cause any problems further down the line.

The costs are pretty similar. Some lenders may charge slightly higher valuation fees depending on the property, but typically the fees are similar to a standard mortgage.

How can a mortgage broker help here?

Our job is to identify which lender is right, depending on the criteria. The main theme here is the property type – we can help identify materials used in the building process that the applicant may not know, unless they’re a builder themselves. Then we can check it meets the lender’s criteria.

This obviously saves valuable time – you want to be certain you’re going to be accepted and the property meets the lender’s criteria before you apply. We can check all that over and give you peace of mind. It’s about saving valuable time and money.

Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

There may be a fee for mortgage advice. The precise amount of the fee will depend upon your circumstances but will range from £99 to £549, and this will be discussed and agreed with you at the earliest opportunity.

Asset Harbour Mortgage & Protection Ltd trading as Asset Harbour Mortgage & Protection are an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority.