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How Do You Get a Mortgage for a Prefab House?

We take a look at mortgages for prefabricated houses. Find out how you can get a mortgage on a prefab house...

No impact on credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: August 12, 2021

Prefab homes in the UK are often associated with the prefabricated houses built in the years after the Second World War to provide temporary replacement homes. While they were intended to be only temporary structures, the housing was used for many years, and some original prefab houses still exist today.

However, prefabricated homes in 2019 more often refer to specialist buildings designed and made by manufacturers off-site in advance, often in sections which can be easily shipped and assembled.

This type of prefabricated housing has become quite popular in recent years, especially amongst millennials who are renting and see prefab homes as a cheap way to get on the property ladder.

Because prefabricated houses fall into what the industry call ‘non-standard construction’, technical difficulties with mortgage lenders can sometimes feel like a barrier. But with the right lender, getting a mortgage on a prefab house shouldn’t prevent you from getting the home you want.

Are there mortgages for prefabricated houses?

Yes, although you may find them more difficult to come by than mortgages for traditionally-built properties.

The mortgage industry categorises prefabricated houses as ‘non-standard construction’. Because of this, lenders may have concerns about the future value of the property or the risk of unknown damage.

To protect their investment, lenders who will give a mortgage on a prefab house may require a larger deposit and you could find it harder to get competitive rates.

When you’re considering getting a mortgage for a prefabricated house you should also consider:

  • How easy you’ll find it to resell
  • How expensive will it be to get home insurance

Because prefabricated houses are classed as being non-standard construction, lenders tend to be more cautious when it comes to offering mortgages on them. But this doesn’t mean it isn’t possible to achieve.

This is just one reason why getting advice early is a good idea. With the right advice, there’s no reason you shouldn’t be able to get a mortgage on a prefab house, it’s simply a matter of knowing which lender to approach.

Can I get a mortgage on a prefabricated house?

Yes, it is possible to find a lender who offers mortgages for prefab houses. However, as a general rule, non-standard properties, such as prefabricated houses, tend to be considered riskier and so can be more difficult to finance.

Because of the non-standard nature of prefabricated houses, lenders’ criteria can vary quite a lot, depending on the property and the borrower.

While many prefabricated houses are fine from a structural point of view, some more risk-averse lenders still won’t consider offering a mortgage on a non-standard construction property if it doesn’t meet their criteria.

You may need to seek out a lender used to dealing with the type of property you want to buy.

Even when you find lenders willing to consider the type of property in question, it’s likely they’ll ask different questions to reach a decision about the mortgage they might be able to offer.

Once a lender does approve you, you should be aware that they could ask for a bigger deposit and will perhaps charge a higher rate of interest due to the fact that they will want to balance the risk in lending to you.

Ways to smooth the path to getting a mortgage for a prefabricated house in the UK

There are a couple of things you could do to help smooth the way to getting the prefab home you want:

  1. Find a local surveyor who is used to approving similar properties for lenders. This could help you figure out how difficult it may or may not be to get a mortgage on the property you want.
  2. If prefabricated houses are common in your local area, it’s possible that a high street lender may have some knowledge about the kind of property you want to buy and therefore be slightly more willing to take the risk in lending to you.

How to get a mortgage on a prefab house

Because of the unusual nature of prefab houses, one of the best ways to get started on finding the right mortgage is to get advice from a specialist mortgage broker.

With so many providers offering vastly different lending criteria finding the right one can make a big difference in getting the mortgage you need. For example, some lenders won’t even consider lending on certain properties, while others will take into account the survey and resulting valuation of a property before making a decision.

Because some lenders won’t consider lending on non-standard construction properties, finding one with the right criteria is more difficult than it might be if you were buying a ‘normal’ bricks and mortar house.

The advisors we work with are whole-of-market and have access to all the lenders who offer mortgages for prefabricated houses in the UK.

They will be able to answer your questions and help smooth the path to finding a lender willing to address your own circumstances because they’re used to dealing with non-standard structure applications.

Call 0808 189 2301 or make an enquiry and speak to a specialist about mortgages on prefabricated houses.

What type of mortgage do I need if I’m building a prefab house?

If you’re considering building your own prefabricated house, you may need a self-build mortgage instead. If you’re building your own home, lenders will want to release the money in stages and inspect the work at regular intervals.

The best way to secure a prefab house mortgage is to find specific mortgage lenders used to lending to borrowers for prefabricated houses.

However, you should seek specialist advice before building a property from non-standard materials, as this will likely affect its value and sellability.

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How to find prefab mortgage lenders

Unless prefabricated houses are common where you live, you’re unlikely to find a high street lender willing or able to arrange a prefab homes mortgage for you.

It’s likely you’ll need to find a specialist lender with experience of arranging mortgages for prefab houses in the UK.

The brokers we work with are whole-of-market experts and work with lenders across the UK.

Speak to an expert who can help you get a mortgage for a prefab house

To speak to an expert broker who can answer your questions and help find a lender who specialises in prefabricated homes mortgages, give us a call on 0808 189 2301 or make an enquiry.

We’ll put you in touch with a broker who can help. They will be happy to answer any questions you may have, find appropriate lenders and help smooth the application process from start to finish, saving you time and trouble without it costing a penny.

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We know everyone's circumstances are different, so if you have a specific question about getting a mortgage for a pre-fab property then get in touch.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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