How to Secure Large mortgages for Unique Properties: Financing the Unconventional

How to Secure Large mortgages for Unique Properties: Financing the Unconventional

Dreaming of living in a converted barn, a historic castle, or an eco-friendly hobbit house? While these unique properties offer charm and character, securing large mortgages for them can be a bit of a maze. But don’t fret! With the right knowledge and approach, you can secure large mortgages and turn that unconventional dream home into a reality.

Understanding Unusual Properties

Unusual properties encompass a wide range of structures that deviate from the standard brick-and-mortar homes. These can include:

  • Barn Conversions: Old agricultural buildings transformed into residences.
  • Listed Buildings: Structures recognized for their historical or architectural significance.
  • Eco-Homes: Residences built with sustainable materials and technologies.
  • Non-Standard Constructions: Homes made from unconventional materials like timber frames, thatched roofs, or even shipping containers.

Why Lenders Hesitate

Lenders often view unique properties as higher risk due to factors like:

  • Marketability: Selling such properties can be challenging, affecting the lender’s ability to recoup funds if needed.
  • Structural Concerns: Unconventional materials or designs may have unknown longevity or maintenance issues.
  • Valuation Difficulties: Assessing the true market value of a one-of-a-kind property can be complex.

Steps to Secure Large Mortgages

1. Engage a Specialist Mortgage Broker:

  • They have access to niche lenders experienced in dealing with unconventional properties.
  • Their expertise can streamline the application process and improve approval chances.

2. Obtain a Detailed Survey:

  • A comprehensive structural survey can address potential lender concerns by highlighting the property’s condition and any necessary repairs.

3. Prepare for a Larger Deposit:

  • Lenders may require a higher deposit to offset perceived risks, sometimes up to 25% or more.

4. Demonstrate Marketability:

  • Provide evidence of demand for similar properties in the area to reassure lenders about resale potential.

5. Showcase Your Financial Stability:

  • A strong credit history and stable income can mitigate lender concerns regarding the property’s uniqueness.

Case Study: Financing a Listed Building

Sarah fell in love with a Grade II listed cottage in the countryside. Aware of potential financing hurdles, she enlisted the help of a specialist broker. Together, they approached lenders familiar with listed properties. By providing a detailed survey and committing to a 35% deposit, Sarah secured a mortgage tailored to her dream home’s unique needs.

Conclusion

While securing a mortgage for an unusual property presents distinct challenges, it’s far from impossible. By taking proactive steps and seeking expert advice, you can navigate the complexities and soon call that unique property your home.

FAQs

1. Can I get a mortgage for a property made from unconventional materials?

Yes, but it may require approaching specialist lenders who understand the specific risks and values associated with such constructions.

2. Are interest rates higher for unusual property mortgages?

Potentially, due to the perceived risks. However, working with a knowledgeable broker can help secure large mortgages at competitive rates.

3. Do eco-homes qualify for standard mortgages?

Some eco-homes may qualify, but unique features might necessitate specialist financing options.

4. What is a listed building, and how does it affect mortgage approval?

A listed building is one recognized for its historical or architectural importance. Restrictions on modifications can make lenders cautious, but many still offer mortgages with the right precautions.

5. Is insurance more expensive for unique properties?

It can be, due to specialized materials or construction methods. It’s advisable to seek quotes from insurers experienced with unconventional homes.

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