Park home purchase

MeGuinness

hi guys hope you can help, selling my current home and wanting to buy a park home....,unfortunately i will be short of 40k  to purchase the park home so as i know that banks don't give mortgages for park home what are my options? i will have 80% of the purchase price and will need just the 20%.
thanx

unkle

Not sure, but £200k for a park home seems an awful lot, in many many areas of the country you can buy a nice house for that,

elsien

I believe there were some companies who offered park home loans, but at a higher interest rate than a mortgage for obvious reasons. Have you looked into those - I guess you’ve considered that it will be a depreciating asset to get a loan on? 

MeGuinness

elsien said:

I believe there were some companies who offered park home loans, but at a higher interest rate than a mortgage for obvious reasons. Have you looked into those - I guess you’ve considered that it will be a depreciating asset to get a loan on? 

 depreciating asset to get a loan on? can you explain better to me what it means?thanx

MeGuinness

unkle said:

Not sure, but £200k for a park home seems an awful lot, in many many areas of the country you can buy a nice house for that,

not caravan home ...a park home , and in the south they go between 250k and 350k for 3 beds depending conditions.

rik111

MeGuinness said:

elsien said:

I believe there were some companies who offered park home loans, but at a higher interest rate than a mortgage for obvious reasons. Have you looked into those - I guess you’ve considered that it will be a depreciating asset to get a loan on? 

 depreciating asset to get a loan on? can you explain better to me what it means?thanx

Park homes only go down in value and they depreciate substantially. As long as you know what you are buying, your stuck paying park fees forever, usually between 4 to 6k per year. If you ever want to sell, it will be worth substantially less than you paid. Is it a static van or an actual lodge . Static caravans become basically worthless after 10 or so years. Lodges hold their value slightly better but continually drop in value as they age.

elsien

MeGuinness said:

elsien said:

I believe there were some companies who offered park home loans, but at a higher interest rate than a mortgage for obvious reasons. Have you looked into those - I guess you’ve considered that it will be a depreciating asset to get a loan on? 

 depreciating asset to get a loan on? can you explain better to me what it means?thanx

It’s not the same as a caravan/mobile home, which I think people may be getting confused with. But they’re not designed for longevity in the same way as traditional bricks and mortar homes. 

So they’re unlikely to be gaining in value, and depending on if you’re buying a new one or an older one, they may lose value depending on this and on how long you think you might be there for. And potentially needing to pay a fee if you do sell on. 

Have you seen this advice and information site? 

https://parkhomes.lease-advice.org/

MeGuinness

rik111 said:

MeGuinness said:

elsien said:

I believe there were some companies who offered park home loans, but at a higher interest rate than a mortgage for obvious reasons. Have you looked into those - I guess you’ve considered that it will be a depreciating asset to get a loan on? 

 depreciating asset to get a loan on? can you explain better to me what it means?thanx

Park homes only go down in value and they depreciate substantially. As long as you know what you are buying, your stuck paying park fees forever, usually between 4 to 6k per year. If you ever want to sell, it will be worth substantially less than you paid. Is it a static van or an actual lodge . Static caravans become basically worthless after 10 or so years. Lodges hold their value slightly better but continually drop in value as they age.

this is what type of park home im talking about..the fees are about 300 pounds per month and includes water and electricity. 

ProDave

^^^  you can dress it up any way you like, but look underneath, that is a twin unit static caravan that just happens to have the skirt bricked up.

Go and research what one of those would cost ex factory off site,  the rest will be the mark up because of the site.

But you don't own the site and never will.

Add in the site rules on condition and age and you might be shocked at what very young age the site demand it be replaced.

Not a wise purchase IMHO.

oldbikebloke

the answer to your question is obvious: you need a top up loan from a "different" sort of lender because, as you already know, you cannot get a mortgage on them. To do that you either:
a) pay a mortgage broker who knows that market
or
b) you DIY using google, for that here is a random search result page to get you started: 
https://goldshieldwarranty.co.uk/park-home-finance-options.html
"While there is no standardised loan for buying a park home, there are a number of companies offer specialised loans that allow you to borrow money to cover the purchase cost, using the park home itself as security. The rates on these sorts of park home loans will not be as competitive as a mortgage, but if you have no other means of financing your park home, then this is likely to the best option for you. Some lenders will even provide up to 80% of the total purchase price, with loan periods up to 15 years. As long as the lender you choose is regulated by the Financial Conduct Authority (FCA), then you should be in safe hands. 

Bear in mind that a park home won't accrue value in the same way as a bricks and mortar property — in fact, they often depreciate in value over time. While this generally isn’t an issue for the residents, it can present a risk for the lender and, as a consequence, this type of loan usually comes with much higher interest rates than a typical mortgage, and will usually require a larger deposit. It also means that, unlike a mortgage, you may not be able to pay off your loan by selling your park home. And, as with any loan agreement, your park home maybe repossessed if you run into arrears. 

Also pay great attention to the other comments made by other posters above:

- do you really know what the site rules are when it comes to age of the property? Some sites require you to replace the home after 10 years or move it offsite - which of course is very expensive and means finding another site that accepts "old" homes.

- do you know what fees the site charges when you come to sell yourself? Some sites have first refusal on any sale or may take a huge slice of your sale value for allowing it to go through - as pointed out, you do not own the land it sits on, they do, so they dictate the terms of your presence on it.   

wizzywilc

They are also notoriously hard to sell, for just the reasons other posters have pointed out.