Mortgages for Kit Homes

Mortgage Service

"The essence of the Fair Mortgages service is professional independent mortgage and protection advice brought to you by a team of specialist advisers and experienced administration support. 

As your mortgage is such an important transaction, good advice is imperative.

Compare Mortgage deals for Kit Homes

If you want to get a mortgage deal for a kit home, you will probably already be aware that this type of property requires a different mortgage approach due to its unusual nature. Many traditional mortgage lenders will be reluctant to offer mortgages for kit homes, because they are likely to see them as a high-risk, unusual mortgage propositions.

However, by seeking expert, independent mortgage advice, it is generally possible to get a mortgage deal for a kit home providing that you approach the right mortgage lenders. 

What is a kit home?

A kit home, an already-popular concept in parts of Europe such as Germany and Scandinavia, is essentially a house that comes as a ready-to-build package, rather than being individually architect-designed. Kit homes can, however, often be personalised to your own specifications and requirements. They can provide a cost-effective way to self-build your own home. They are also often extremely eco-friendly, featuring the latest in insulating and energy-efficient home building technology.

How can I get a mortgage deal for a kit home?

A kit home will generally require the same kind of mortgage as any other self-build home. Fortunately, there are plenty of mortgage providers who specialise in offering mortgage deals on self-build houses, so providing you approach the right kind of mortgage lender, you should find that you can get the mortgage deal you need to get started on building your kit home.

Some mortgage lenders who specialise in the self-build and kit home mortgage market may be prepared to lend you up to 95% of the land and building cost you require. If you do not have a large amount in savings to fund the initial land purchase and build, this kind of mortgage deal for your kit home could prove to be extremely useful.

As with any mortgage deal, the amount you may be offered for a mortgage will depend on various factors like your income, credit history and affordability calculations.

How do mortgages for kit homes work?

In contrast to the majority of traditional mortgage deals, mortgages for kit homes are often designed to release funds on a staggered basis. This method of financial backing can be very useful to both mortgage lenders and mortgage seekers.

Firstly, it means that you as a self-build mortgage seeker may be able to access the money you require to buy the land for your kit home project or to assist with the initial building costs, based on the estimated final value of the house.

Secondly, releasing the money in stages provides reassurance for mortgage lenders that it is being spent to keep the building project on track, and they may therefore be willing to lend a larger amount then they might offer as a single lump sum.

An example of how the mortgage money for a kit home may be released in stages can be found below:  

• Step one – Cash is released to allow you to buy the land and materials required for your kit home building project

• Step two – Finance is released to allow you to pay your building contractors, who can then begin work on the structure of the kit home

• Step three – Money is released to fund interior construction, plastering, plumbing and other essential additions to make the property habitable