Difficult Properties to Mortgage: Unusual Property Types
Difficult properties to mortgage may cause a huge deal of disappointment at the mortgage offer stage. Did you know that there are certain property types that are difficult to get a mortgage for?
As a first-time buyer, it can be tempting to want to purchase a cheap looking property that may be out of the ordinary. However, this can lead to disappointment and heart break down the line.
With a current lack of housing supply in Ireland, the Mortgage123 team are seeing an increasing demand for unusual properties. It is very important to send a link of the property to your lender or broker so that they can thoroughly check if it can be approved for a mortgage.
A lot of our clients are looking at properties outside of Dublin due to high costs but also due to the rise of remote working. This allows more options and a lower price tag if you are considering a rural property. Locations such as Roscommon or Mayo which were not as popular for first time buyers in past years are now gaining popularity.
We have outlined below the types of properties that may be difficult properties to mortgage to save you the time and heartbreak.
Properties to Avoid if You Want to Get a Mortgage
1. Down a country road with no shared access
If you haven’t agreed a right of way to the property, this could be a big issue for lenders. This may make your chosen buy a difficult property to mortgage.
Another concern is if the property has shared access with a family member.
This all comes down to the unfortunate event if you have a dispute with the landowner with the lane, they might actually block access to your property. For more information about the recent changes to registering a private right of way, see the Property Registration Authority’s website.
2. Houses with two kitchens can be difficult properties to mortgage
You may think ‘a house with two kitchens, that’s a great idea’ but think again. These can be difficult properties to mortgage.
If a celebrity has four kitchens in LA, it does not mean you need four kitchens in Leitrim. The majority of Irish lenders will not give mortgage approval for a house with two kitchens.
The man reason is that it may cause questions over multiple occupancy. Also, beware of properties on the market such as semi-detached houses that are now selling as one property.
3. A house joined onto another building
Examples of this include:
- A warehouse
- A shed or outhouse
Lenders might be worried that you would use the additional building as a business, i.e. a coal shed could be used to store coal that is to be purchased.
This all comes down to the type of shed and the planning for it.
4. Thatch cottages carry safety issues
These old Irish property staples may be beautiful to look at but can be difficult to get a mortgage for.
If something is excluded from the building, this may cause lenders not to lend due to insurance issues.
5. A property located on a flood plane
Lenders may not lend due to insurance reasons, so it is very important to thoroughly research the property.
Ensure to send a property link to your broker so they can double check all is okay for approval.
6. Timber framed house would be difficult properties to mortgage
This depends on the type of construction and can vary from lender to lender. It is a risky investment to purchase as no lender will lend until a house is built, so not very secure.
- Log cabins – (Usually a NO from lenders)
- Tiny house
- Shipping container
7. Mobile homes
You will not get mortgage approval for a mobile home in Ireland as it is a portable property.
8. A property with a self contained unit
If a property has a separate garage or a separate entrance to a kitchen as an example, the lender would be concerned about a third party living there. Say if there would be an elderly relative there, or if renting that it is planning compliant.
9. A property over a business
Does it have its own entrance? If not, it’s a NO for mortgage approval.
If the property has a shared entrance, you might be restricted on loan to value depending on the premises it is over.
You should also consider any smells and noise pollution if, for example, the building was over a restaurant. Would you be okay with this?
10. A property with over 2 acres of land
The lenders could almost class over 1.5 acres as a small holding/farm.
How would a lender view a property on 5 acres selling for 500k? They would value the property on 1-acre, e.g. for 420k, and the 4 acres say for 80k. Therefore, the amount they would lend you would be 420k, as they would exclude the four acres.
11. Difficult properties to mortgage can include Convents / churches / old school houses
These unusual layout properties that are increasing in popularity are dependent on usage. Has usage been changed over on the folio?
If the usage is residential, it is generally okay to get a mortgage.
If you are unsure of a property type that you have seen or have any questions, don’t hesitate to contact our brokers today on (061) 599 990 and we will ensure the property is mortgageable.
