Non Standard Construction Mortgage
What is a non-standard construction mortgage?
It helps to understand that a standard construction is a building made of brick, stone, or is perhaps timber-framed. A non-standard construction is anything else! A concrete sectional home or a prefab home are common examples, as are steel framed properties and houses with a thatched roof.
A non-standard construction mortgage is a loan that is specifically designed to enable you to buy one of these non-standard properties
Why do you need a special mortgage for non-standard construction?
The simple reason is that many traditional mortgages aren’t suitable for this kind of home.
We had a perfect example last year: a client came to us having been declined by two banks because the home she wanted to buy was a non-standard construction. Unfortunately, she had already lost some money, after valuation surveys done by the lenders at which point they declined.
We explained all about non-standard construction and the lenders that cover these homes. We found a suitable lender and the client now lives in the property.
How can you tell if a home is non-standard construction?
With some homes, it can be fairly easy to tell – a concrete sectional home looks very smooth on the outside as it is not made from bricks. A thatched home is obvious too.
With others, it may not be obvious whether the home has a steel or timber frame. You will need to rely on the estate agent and vendor to confirm the details. As a general rule, if the house looks different from a standard brick or stone home, it’s worth asking questions about the construction.
Is it better to avoid a non-standard construction home?
The main thing is to do some research before making any commitment. It can be straightforward to get a mortgage for some non-standard homes and more difficult for others.
A lot depends on the year that a property was built. For example, steel frame homes that were built recently are easier to get mortgages on than older properties.
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Are listed buildings classed as non-standard construction?
Many listed buildings would be classed as non-standard – but not all of them. With a listed building, a lot depends on their Grade. More than 90% of homes are Grade II, which is the least restrictive – yet they can still create some problems with mortgages.
I’ve never arranged a mortgage on a Grade I building – these can be castles or chapels which we do have in our area, but they aren’t very common.
Do I need a non-standard construction mortgage on a Barn Conversion?
A barn conversion isn’t really non-standard, but some lenders may have concerns. These properties are often classed as a new build and are subject to guarantees at the time of construction.
A barn conversion that comes with a form of architect’s warranty will usually be easier to mortgage. An example is the ABC+ Warranty.
I myself was interested in buying a barn conversion once, but the vendor had done the work themselves. Because there was no architect warranty our lender wouldn’t give us the mortgage so we walked away.
How can a Mortgage Broker like the Mortgage Co help?
It’s always good to talk to a Mortgage Broker, but especially so if there’s anything unusual about your situation or the property you want to buy.
In this example, we know which lenders will lend on non-standard constructions. Our advice could save you from losing money on surveys and other property costs.
In the majority of cases, a non-standard construction mortgage won’t be any more expensive. In many cases, it can actually be cheaper – as a Mortgage Broker, we go for the cheapest lender first and find out whether they would lend on a non-standard property.
When is the best time to get a Mortgage Broker involved?
The sooner the better! If a buyer’s contacting me to say they’ve seen a house and are thinking of making an offer, I normally ask for the property details. I can tell what type of property it is and will know the right questions to ask the estate agent or vendor.
But many clients talk to us right at the start of their purchase journey. We can help you find out how much you can borrow and the types of property you can start looking at. We’re here to help, so just give us a call.