While you might think that there is just the one kind associated with traditional mortgage, whether it be a 100%, no down payment or interest only mortgage, there is also another type, known as a non standard mortgage. This is for when the property you're buying isn't made of the normal physical construction; it could be steel frame, self-build or every other type of material.
If this is the case, most lenders won't actually provide you with a mortgage, since there's no real resale value associated using the property, and they can't forecast what the self-build or similar property will be worth later on (unlike a more traditional building). However, you can still obtain a non standard mortgage from some lenders - it just results in different terms from what a more standard one might offer.
Assessment
Before you get this type of home loan, you'll be assessed by the lender to make sure that you could pay back the mortgage itself. This is where it's just like a normal mortgage. They will also assess whether they believe they could make any money back on your home, if it was to be repossessed. If the lender feels they might sell your property again, the better the chance of you qualifying for a non standard mortgage.
You can actually pre-guess whether you'd be entitled to non standard mortgage or not, by knowing some from the criteria that will usually work against you. These consist of:
If this is the case, most lenders won't actually provide you with a mortgage, since there's no real resale value associated using the property, and they can't forecast what the self-build or similar property will be worth later on (unlike a more traditional building). However, you can still obtain a non standard mortgage from some lenders - it just results in different terms from what a more standard one might offer.
Assessment
Before you get this type of home loan, you'll be assessed by the lender to make sure that you could pay back the mortgage itself. This is where it's just like a normal mortgage. They will also assess whether they believe they could make any money back on your home, if it was to be repossessed. If the lender feels they might sell your property again, the better the chance of you qualifying for a non standard mortgage.
You can actually pre-guess whether you'd be entitled to non standard mortgage or not, by knowing some from the criteria that will usually work against you. These consist of:
- Properties with flying freeholds. So, for instance, if among your upstairs rooms overhangs one of your neighbour's reduce rooms, that's known as flying freehold, and lenders aren't too keen on these kinds of property.
- High-rise flats, particularly ones that are more than 5 storeys, or if there are balconies on the actual flats that allow outside access.
- Local authority possessed, or ex-local authority owned flats. Lenders are particularly loathe to offer mortgages on properties where a few block of flats, and there are still some which are owned by a council or tenant association - they far prefer if all of the flats belonged to homeowners.
- Any properties that are above shops will also be very unpopular with lenders, due to the threat of additional deterioration, burglary or fire.
- If the property you're purchasing is either steel-framed or timber, like a log cabin for instance, or a pre-fabricated home.
- Other types of no standard properties, such as ones that are made through non traditional build or material.
