Mortgage on a Park home (A complete guide)

In this brief guide, we are going to discuss getting a mortgage on a Park home and any considerations you may have to take into account when getting a mortgage on a Park home.

Can you get a mortgage on a Park home?

No, you cannot get a mortgage on a Park home as a Park home is not a fixed site such as land. You will not be able to get a mortgage on a static Park home, lodges or park homes.

In some cases, you may be able to get mortgage finance as part of a Park home purchase if you are also buying the land.

In some cases, if your park home is built with bricks then you may find that you are able to get a mortgage on it.

To do this you should check the land registry database to see if the property is listed.

You should note that when buying a park home you are not buying the freehold but more likely the leasehold.

How to finance a Park home?

If you want to finance a Park home you may be able to use specialist park home finance.  There are some specialist park home finance lenders who will loan up to 80% of the property value.

The park home finance lender will look into your circumstance, your income, the type of property you want to buy etc and then decide on how much they can offer you.

If you have bad credit then you may find it much harder to get park home finance but there may be some mortgage lenders willing to consider you.

Government schemes for mortgages on Park home

Unfortunately, you will not be able to use most of the government schemes available due to the fact that you are buying a Park home.

Some of these schemes include:

• Lifetime ISA– gives you a government bonus of £1,000 if you save a maximum £4,000 a year.
• Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
• Help to buy equity loan– gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
• Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
• Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
• Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
• Right to buy– allows you to buy your home at a discount price.
• Preserved right to buy– same as above.
• Right to acquire– similar to the above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

Use a mortgage broker for your mortgage in principle

You may want to use an independent mortgage broker to help you get a mortgage on your new home.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.

This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. 

This will allow you to shop for your home as more estate agents and sellers may take you seriously and it will also give you confidence that your mortgage is indeed a possibility before you make a full mortgage application. 

Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document that details the features of your mortgage including how much you will pay per month.

It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.

Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.

They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer, and set a completion date with the seller or their conveyancer.

This will then bring an end to the conveyancing process, at which point you will receive the keys to the house and move in.

FAQs: Mortgage on a Park home

In this brief guide, we discussed getting a mortgage on a Park home and any considerations you may have to take into account when getting a mortgage on a Park home.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.