How Do You Apply For A Mortgage In Unique Circumstances?
Every home and every homebuyer is unique, and so for every straightforward mortgage and remortgage, there are many examples of borrowers who have rather unique or adverse circumstances or are trying to buy somewhat unconventional homes.
There are so many different types of mortgage types that are available in these situations and specialist mortgage advice is also available to ensure people get the mortgage product that suits their needs the most.
The first step in applying for a complex or specialist mortgage is knowing whether you will need it.
Most situations where a complex mortgage is needed can be placed into one of three groups: where the buyer’s circumstances are unique, where the desired house is unconventional, and where the buyer has unique plans for the home they are buying.
Here are some circumstances where you may need a complex mortgage.
Unconventional Houses
The UK is filled with homes that are filled with a particularly unique character, from early examples of timber frame homes, single skin brickwork or ex-council houses, to manor houses and even listed buildings.
Many lenders are focused on the potential resale value of a home they mortgage, and so any home that has complications to resale can cause them to baulk and be concerned about whether a risky home would be worth lending the money to buy.
Another factor in an unconventional home is cost. If you plan on buying a particularly expensive mansion or manor home, certain lenders are unable or unwilling to take on the risk.
As well as this, there is also building projects and developments, where mortgage providers are asked to loan money for a project that does not exist yet.
Ultimately though, the key to finding a lender who will approve an exceptional circumstances mortgage, is about finding one that shares your vision and your idea for your home. Most types of property have lenders with specialist knowledge of the market which can help.
Unique Plans
Most mortgage products are aimed at first-time buyers, people planning to remortgage their home or who are buying their next home.
If you are looking to buy-to-let, are buying a guesthouse for people to stay in, or are seeking funding for a housing development, this can lead to complications, although if you have a comprehensive business plan and choose the right lender, not insurmountable ones.
Personal Circumstances
Most complex loans are due to the increasingly complex financial and personal circumstances of prospective buyers.
Many traditional building societies and banks lack the resources to understand non-traditional sources of income, contractors, professionals who rely on bonuses as part of their income and especially self-employed people.
Despite such a large proportion of the UK population working for themselves, lenders are wary of loaning to self-employed people, particularly if their source of income varies wildly from month to month.
Many building societies will base their loaning criteria on having proof of monthly income, and will typically demand a lot of information on past earnings; the standard amount requested is at least two years’ worth of financial information.
As well as this, some people have unfortunately accrued a less than ideal credit score as a result of defaults, arrears on loans or missed payments, as well as those who are subject to a County Court Judgement or have been made bankrupt.
Lenders are looking for security, and so it is important to seek advice if you fit into a category lenders see as more of a risk. There may be ways around your current situation, such as relying on a guarantor.
