Modular Home Mortgage

Modular housing is seen as a modern method of construction, yet prefab or prefabricated homes have been around for more than 80 years. Many were built just after the Second World War because they were cheap and quick to build.

There is a difference between a modular and a prefab home. A modular home is mainly built offsite in contained units or modules. They’re transported to site and put together. We’ve all seen Grand Designs where they’ve come in with these designs – they can be very individualised and can look amazing.

A prefab home is basically made from prefabricated panels. They’re made in a factory and put together on site. There can be a bit of a stigma around prefab houses, especially those built after the war. They were mainly built from concrete and typically only had a shelf life of 10 years – but many still exist.

Because they’re made of concrete, they can be tricky. It’s always worthwhile checking out the construction type and making sure you know what the options are.

The great news is that as lenders have gained experience in this modern method of construction, their knowledge and appetite for lending on these varieties has increased.

There are still normal eligibility criteria around your income, credit score and your deposit. A lot of lenders now are looking to lend on these properties – they typically say it’s down to the valuer’s comments. But as long as we know that a property is of a strong construction type and there’s nothing majorly wrong with it, there are often lending options.

It can be a bit different with the concrete prefab side, but I would talk about that on an individual basis.

If a modular extension has been added to the house, we’d go through it while researching the right type of lender for you. We’d speak to the lenders about that to make sure it shouldn’t cause any issues. It would then be very much down to the valuer’s comments at the point of valuing the property.

If it’s a modern method of construction and has been built correctly, there will often be options.

Maybe they’re looking at a 5%, 10% or 15% deposit, but it would very much depend upon you as an individual and what you’re looking to do. I know that’s a bit vague, but it’s hard to answer on a theoretical basis. We would go through all of that criteria to really understand what it is that you could borrow against any property you were looking to buy.

Unfortunately modular homes do fall under non-standard construction. Standard construction is bricks with a tiled roof. Anything outside of that are typically non-standard properties. Non-standard will always pose more of a challenge than a traditional property.

But that’s where that research at the very beginning comes in. Understanding what the options are and talking to lenders will really help us make sure that it doesn’t become difficult and challenging.

They can be. It’s difficult to answer because it depends on the property and location. But generally speaking, if you start doing some research on modular housing, you’ll see they can be cost effective to build and run. They can be energy efficient. There’s lots of great things about them.

Look at whether it is a good investment for your area. Is it the right thing for you? Has it got good resale value for when you come to sell it at some point in the future?

It will very much depend upon the area, again, and what you’re looking to do. The first thing to do is talk to the local planning officer.

Explain what you’re thinking of building or doing. If it’s a pre-built home then you won’t need to worry about the planning permission. But if you’re looking to build or extend an existing property, the planning office is going to be the best place to start.

A lot of high street banks are looking to lend on these types of properties, typically Halifax and Santander have lots of experience in lending on modular houses and prefab homes.

I work with over 90 different lenders so there will be some that will do this. On the flip side of that, there would also be some lenders that point blank refuse anything that’s not a traditional build.

I’ll talk to you about your options with lenders and any restrictions as part of that initial conversation and research into the property you’re looking to buy.

It will very much depend upon you as the individual and the debt you have. Are we talking bankruptcy, IVAs and defaults or late and missed payments?

Some bad credit can be okay – it will then depend on the lenders we look at and their property criteria.

Building these properties is generally cheaper and so is running them. If you’re looking to build one, the speed of construction is a lot quicker than building a brick and mortar house. There are potential energy efficiencies as well.

There can be downsides depending on the construction type. If it’s a prefab concrete home, that could pose a challenge. But there are things that can be done around that. It just needs to be looked into.

There may be restrictions on the number of lenders available to you, but there are still a good number that will consider this. It’s all about the individual and the home. It’s about whether you’re comfortable with what you’re buying and whether it provides a good opportunity for you.

It depends what you’re looking to do. If you’re looking to build, there’s the bridging loan side – that might work for you.

If you’re looking at a property that doesn’t fit the lenders criteria, you might potentially be able to look at secured loans. It depends what you want to do, but the options are not vast.

But for anybody looking at a prefab or modular home and struggling with the mortgage side, pick up the phone and have a conversation with me. There might be a different way of doing it, and perhaps I can help.

With any modular or prefab home, do your research from the beginning. When you’re looking at unique and individual properties, make sure you really know what your options are.

You might get lucky and walk into your high street bank and they say yes – but you might not. It’s my job to know the market and the opportunities available for you.

Trying to find something can get incredibly frustrating, whereas hopefully I can come up with some really quick answers for you on what you’re looking to do.