Can You Get a Mortgage on a Park Home?

Residential Park homes offer an appealing lifestyle, particularly for retirees seeking affordability and community. As you consider this housing option, you might wonder, “Can you get a mortgage on a park home?” 

Whilst the simple answer to this question is no, there are options to be explored, which we have detailed below.

Understanding Park Homes

Park homes are distinct from traditional houses. They are typically manufactured homes situated in private estates known as residential parks. These homes appeal due to their affordability, lower maintenance, and close-knit community atmosphere, making them especially attractive to those looking to downsize or simplify their living arrangements. 

While you still pay council tax on a residential park home, they are often much more affordable to purchase than traditional bricks and mortar homes. They are also built with over 45’s in mind, aiming to create communities for adults as they head towards retirement and what that might mean in terms of lifestyle changes. 

The homes themselves offer unique features to suit over 45’s, including more compact living, meaning there is less to maintain and fewer finances needed in the long term to keep on top of the home. Residents can enjoy living in beautiful surroundings with much less upkeep than if the land were theirs, as the parks provide private outdoor spaces as well as communal green spaces that the park operators themselves maintain.

Why Traditional Mortgages Aren’t Available for Park Homes

Mortgages are not available on park homes, as obtaining ownership of the home is different from that of traditional housing. 

One of the main differences is that while you purchase and own the home itself, the land on which it sits is owned by the park operator. The land is then paid for on a rental basis by the homeowner, usually by means of monthly or yearly site fees paid by the owner to the residential park operator.

The lease of the land is seen as a less secure form of ownership by lenders, so traditional mortgages are not offered in the event of the lease expiring before the mortgage is fully paid.

Alternative Financing Options for Park Homes

Alternative Finance Options

There are several alternative routes that can help you secure your dream park home. Let’s explore the various options available, ensuring you have the flexibility and support needed to make your purchase a reality.

Purchasing Outright

One option available to those looking to purchase a residential park home is to purchase the home outright. 

Park homes are often cheaper than brick and mortar houses and so offer the opportunity to release equity when selling your current property. 

One thing to note when considering this option is the ongoing site or pitch fees to be paid to the operator in order to rent the land, so ensure to factor this into your budget. Each park operator varies in terms of fees required and how often they need to be paid so this is worth asking when you are inquiring with individual parks.

Part-Exchange Schemes

Another option worth considering when purchasing a park home is to part exchange your current property with the park operator you are looking to buy your park home from. The park operator will work with a third party to buy your current property as part of the deal on your new park home, allowing for an immediate solution to securing and moving into your park home.

Here at Tingdene, we work closely with Move+ to facilitate the part exchange of your current property. They manage the sale, including arranging local and independent valuations, while allowing you to stay in control of the sale. As the park operator, we then pay the agent fees, so you don’t have to.

It is worth noting that participating in a part exchange scheme does not always mean you achieve the full market value of the current property due to the speed at which the sale takes place, so bear this in mind when considering this as an option.

Specialist Loan Agreements

Specialist Loans

If neither of these options are viable, it may be worth considering taking out a specialist loan agreement. These loans are not the same as taking out a mortgage, as they are with specialist lenders who offer loans specifically for purchases of park homes.

These loans offer the opportunity to access the money needed to purchase a park home, and the repayment terms can be more flexible than traditional mortgages.

One thing to bear in mind is that interest rates may be higher than those offered by traditional lenders. You will need to make sure that you can afford the monthly repayments as well as the site or pitch fees associated with the park.

Choosing the Right Finance Option

The right option for you is going to depend on your financial circumstances and your reasoning for moving into a park home from your current property.

Property Valuation

A good first step would be to get your current property valued so you have an idea of the sort of equity you have. It is worth getting an independent valuation to get a realistic view of how much your home is worth and have in mind the lowest offer you would accept to keep your budget for your new home viable. 

Research Park Home Locations

Also, ensure you look at residential park homes in areas you would be happy to live in, as prices vary county to county as with bricks and mortar homes. Narrow your options down considerably so you can gain a full overview of the fees and expenses in each park that you would need to pay in order to move.

Outright Payment or Part Exchange Option

Part Exchange

If the valuation of your property does not garner results that make outright payment an option, then go back to the park operators you are interested in and get all the information necessary to consider the part exchange of your current property. 

Similarly, if your personal circumstances mean that moving is something that needs to happen fairly quickly, then the part exchange option may be the best bet. 

Specialist Loans

If neither of these are possible for you, then looking into a specialist loan is worth some thought. Just ensure you budget carefully and check the interest rates and terms carefully so you can be financially prepared for the future.

Professional Advice

Ensure you do your own research and seek professional advice from specialists in the park home industry before committing to any of the finance options available to you. Buying a residential park home, like any property purchase, is a big commitment so it is important that you research and factor in all eventualities before making a decision.

Advantages of Owning a Residential Park Home

Advantages of Park Homes

There are so many benefits associated with owning a residential park home. 

Financial Freedom

The financial freedom that comes with releasing the equity on your current home not only allows you to purchase the park home itself, but it can also free up additional funds to live the lifestyle that suits you best. 

Whether it’s joining the new local sports clubs or travelling more frequently or further afield, the equity release and lower running costs associated with park homes can open so many new opportunities for you as you embark on the next chapter of your life.

Community Living

Furthermore, moving to a community with people of a similar age and with similar intentions for the next stage of life opens the door to much closer knit communities than most brick and mortar properties offer.

You can enjoy life on a residential park with neighbours who share similar interests, who encourage neighbourly interaction, and who are there to help each other when needed. 

Whether that is borrowing a cup of sugar or keeping an eye on your property while you travel for an extended period of time, the communities created within residential parks are hard to beat.

Low Maintenance

Another huge benefit of moving into a park home is the low maintenance nature of the homes and their surroundings. There are considerably less tasks involved in maintaining a park home, whether it’s cleaning the interior or mowing the lawn. 

In comparison to traditional houses, you will find yourself with more time to spend doing the things you enjoy than the tasks that need to be done. This is not only beneficial to your health and wellbeing, but it also gives you more financial freedom.

Wrapping Up

Wrapping Up

Whilst the answer is no, you cannot get a mortgage on a park home, this does not mean that options for purchasing one are limited. Whether you release equity, go for a part exchange, or look into specialist loans, there is more than one way to ensure your dream of buying a park home comes true.

There are so many benefits to moving onto a residential park that park homes are becoming more and more attractive to the adult community. Releasing equity, freeing up your time to do more of what you enjoy, and becoming a part of a community are just some of the benefits park home living can offer. 

If you are considering the move, why not have a look at the residential parks we have to offer here at Tingdene or contact us today at [email protected] or 01933 770717 for more information on how we can help you make this move a reality.