Fancy being King of your own castle?
Securing a mortgage for a castle in the UK may seem like a leap into the realms of fantasy, yet it is a real possibility for those interested in owning a piece of history.
Buying a castle is not only about acquiring a home but also about investing in a historical monument. These properties come with unique features, from handcrafted stonework to expansive lands, and carry with them the gravitas of centuries past.
However, buying a castle is not as simple as buying a regular house.
It requires a different approach, especially when it comes to financing. In this article, we’ll explore the process of getting a mortgage for a castle and provide you with some tips to make your dream a reality.
Understanding Castle Mortgages
Purchasing a castle is a unique venture, with specific mortgage requirements and considerations, such as non-standard construction, listed status and historical value.
From a mortgage perspective, castles fall under the category of non-standard construction buildings, which encompasses any structure deviating from stone or brick walls and a tile or slate roof.
Additionally, castles, like any pre-1840 property, are designated as listed buildings.
This combination will reduce the number of lenders willing to fund the purchase of a castle.
By using an experienced mortgage broker you will gain access to the specialist lenders and banks that do want you to be king of your castle.
Applying for a castle mortgage
The process of applying for a castle mortgage requires the same documentation as any other property, including proof of income, employment history, and credit checks. Additionally, certain unique aspects of castle properties must be considered.
Property Valuation and Surveyors
Because castles are challenging to value, lenders will require surveyors to assess the property and provide a valuation. This reassurance is necessary for lenders to ensure the property’s worth matches the amount you’re borrowing. Additionally, lenders need to understand the extent of potential repairs, as it affects the amount they’re willing to lend.
Higher Deposits and Interest Rates
Expect to provide a larger deposit than usual for a castle mortgage, as these properties are considered high-risk investments. Budget for at least 25% deposit and 75% LTV loan. Higher interest rates may also apply, with lenders viewing you as a higher-risk borrower.
Seeking Specialist Mortgage Advice
If you’re contemplating purchasing a castle, a specialist mortgage adviser can guide you through the process. By collaborating with a wide range of providers and niche lenders, including private banks, brokers can assist in finding a competitive mortgage that suits your needs.
CONTACT A MORTGAGE BROKER
If you are ready to take the next step then we can put you in touch with a fully qualified independent mortgage broker.
Financing a Castle Restoration
If the castle of your dreams needs some serious restoration then a long term mortgage may not be available, just yet.
Mortgages are for completed projects that are habitable.
There are two options that can help to finance a castle in need of some TLC:
Bridging finance – A bridging loan is short term finance secured on the property. This would provide the funds to purchase the castle, although you need to offer up 25% in cash for the deposit.
Development finance – Property development loans are very similar to bridging finance, in as much as they are a short term facility, which takes the castle as security. But these lenders understand that you need ongoing money to fund the restoration, which then should increase its value.
How a broker can help
You definitely can’t pop down to the local high street and pick up a castle mortgage.
Purchasing a castle will rarely be a straightforward process. With buildings of this age, and unique design, it’s a good idea to tread carefully.
But if your heart is set on castle living then it’s important to work with an experienced independent mortgage adviser. There could be a few stages of financing needed, from initial purchase, through the development phase and then a longer term mortgage.
Let Respect Mortgages put you in touch with one of the UK’s best mortgage brokers, who operate nationwide and can provide the breadth of service you need.
