21 February 2020
The short answer is no – you cannot get a traditional mortgage on a park home. However, that does not mean your plans to live in, downsize to, or retire to a park home are out of reach.
Whether you are looking for a park home by the sea, a simpler lifestyle, or a more peaceful place to retire, there are still finance options that may help make your move possible.
Below, we explain why park home mortgages are not available and outline the main ways you can finance a residential park home.
Why Can’t I Get a Mortgage on a Park Home?
Park homes are built, sold, and owned differently from traditional brick-built homes. This is the key reason why a standard park home mortgage is not available.
When you buy a bricks-and-mortar house, it is registered with HM Land Registry, and you usually own both the property and the land it sits on. A mortgage can therefore be secured against that registered property.
By contrast, when you purchase a residential park home on a park, you own the home but not the land beneath it. The land remains the property of the site owner and is leased to you through a Site Agreement. Because the home is not secured against owned land in the same way, traditional mortgage lenders will not usually offer a mortgage for it.
How Can I Finance a Park Home?
Although park home mortgages are not available, there are several ways you may be able to finance your move.
- Buy outright. You may be able to purchase a park home using savings, pension funds, or proceeds from the sale of an existing property.
- Use property equity or part exchange. Some buyers use the equity in their current property through a part exchange scheme. This can help avoid delays and reduce the stress of a traditional property chain. If your current property is worth more than your new park home, you may receive the remaining balance as a lump sum.
- Consider specialist park home finance. Specialist finance providers may offer park home loans designed specifically for this type of purchase. These providers understand how park home finance differs from traditional mortgages. Always check that any financial adviser or provider you speak to is appropriately regulated by the FCA.
Omar Group does not offer finance or financial advice – when seeking advice, please note that financial advisers are required to be registered with the FCA.
