Best Cheap Park Home Mortgage Lenders in UK (2024 Rates)
Representative example: If you borrow £34,000 over 15 years at a rate of 8.26% variable, you will pay 180 instalments of £370.70 per month and a total amount payable of £66,726.00. This includes the net loan, interest of £28,531.00, a broker fee of £3,400 and a lender fee of £795. The overall cost for comparison is 10.8% APRC variable. Typical 10.8% APRC variable
Representative example: If you borrow £34,000 over 15 years at a rate of 8.26% variable, you will pay 180 instalments of £370.70 per month and a total amount payable of £66,726.00. This includes the net loan, interest of £28,531.00, a broker fee of £3,400 and a lender fee of £795. The overall cost for comparison is 10.8% APRC variable. Typical 10.8% APRC variable
Understanding the world of secured loans can be tricky, but don’t worry! This article is here to help you. Each month, more than 6,900 people visit our site for advice on secured loans, so you’re in good company.
Believe it or not, in the UK, early repayment fees for secured loans have more than doubled since the start of the decade, peaking in 20181.
We’re going to talk about park homes and how you can get a loan to buy one. Park homes are a type of housing that can be cheaper and easier to look after. They’re popular with older people and those who enjoy being part of a safe community.
This article will help you understand:
- What park homes are and why people like them.
- The true cost of a bad secured loan.
- How to find the right park home for you.
- Legal things to think about when buying a park home.
- How to pay for a park home, including using a mortgage.
If you’re worried about getting a secured loan or being in debt, you’re not alone. This guide is here to make things clearer, so you can make the right choice for you.
What Are Your Options for Funding the Purchase of a Park Home?
You may be able to free up equity in your existing home, and you can use an equity calculator to do this. Or there may be other forms of finance available to you. I have listed some possible options below.
- If you have enough savings, you can buy a park home outright. Interest charges and monthly payments are avoided, but it may not be feasible for everyone.
- Banks and other lenders may provide personal loans to finance the purchase of a park home. A personal loan typically has fixed interest rates and repayment periods, but it may require a good credit score for you to be accepted.
- Several specialist finance providers offer loans specifically for park homes. Loans like these may have more flexible repayment terms, but their interest rates may be higher.
- Park homes can be purchased with equity released from traditional residential property. You can get a lump sum without monthly payments, but it may reduce the value of your existing property.
Secured vs Unsecured Loan
While discussing your options to purchase a park home, it’s important that you know the main differences between a secured and an unsecured loan. Here’s a quick table explaining things in more detail.
| Category | Secured Loan | Unsecured Loan |
|---|---|---|
| Collateral Required | Yes, typically a property | No collateral required |
| Typical Loan Amount | Large amounts – typically above £20,000 | Up to £25,000 |
| Loan Terms | Longer terms, up to 25 or 30 years | Shorter terms, usually up to 7 years |
| Interest Rates | Variable and often lower; influenced by LTV and loan term | Often fixed; influenced by borrower’s credit score |
| Approval Time | Typically 1-2 months | Usually within 1-2 weeks |
| Risks | Losing the asset if repayments are not kept up | Loan growing due to interest, especially for those with poor credit |
Can You Get a Traditional Mortgage To Purchase a Park Home?
In some cases, obtaining a mortgage for a park home can be more difficult than for a brick-and-mortar house. Since park homes are considered mobile homes, their value can depreciate over time, making them a riskier investment.
Some lenders, however, offer mortgages specifically for park homes, offering competitive interest rates and more favourable repayment terms.
A mortgage application for a park home typically requires detailed information about the home, the park where it is located, and your financial situation. In addition to a deposit, you may need to demonstrate your income and creditworthiness.
An experienced park home lender can provide guidance and advice on the application process and any special requirements that may apply. From my experience, traditional mortgages can be obtained to purchase a park home, but they may require more effort and research and may not be available from all lenders.
Lender |
APRC |
Monthly payment |
Total amount repayable |
|---|---|---|---|
| United Trust Bank Ltd | 5.99% |
£218.73 |
£26,247.92 |
| Pepper Money | 6.86% |
£220.24 |
£26,429.17 |
| Together | 6.95% |
£220.40 |
£26,447.92 |
| Selina | 7.5% |
£221.35 |
£26,562.50 |
| Equifinance | 7.7% |
£221.70 |
£26,604.17 |
| Spring | 10.5% |
£226.56 |
£27,187.50 |
| Loan Logics | 11.2% |
£227.78 |
£27,333.33 |
| Evolution | 11.28% |
£227.92 |
£27,350.00 |
Representative example: If you borrow £34,000 over 15 years at a rate of 8.26% variable, you will pay 180 instalments of £370.70 per month and a total amount payable of £66,726.00. This includes the net loan, interest of £28,531.00, a broker fee of £3,400 and a lender fee of £795. The overall cost for comparison is 10.8% APRC variable. Typical 10.8% APRC variable.
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How To Find the Best Cheap Park Home Mortgage
To help you identify the most competitive options for a cheap park home mortgage, here are a few steps you can follow to help you find an affordable mortgage with the best terms.
- Compare mortgage rates and terms from different lenders. Compare options from multiple lenders with online comparison tools or a mortgage broker.
- Interest rates are an important factor when comparing mortgages. Keep your long-term monthly payments affordable by finding a low-interest rate.
- The loan term will also determine a mortgage’s cost—the longer the term, the lower the monthly payment, but the higher the interest over time. Consider a shorter term.
- Additional fees, such as legal and arrangement fees, may apply to park home mortgages. Consider these costs when comparing.
- There may be specific eligibility requirements for park home mortgages, such as a minimum deposit. Apply only if you meet these requirements.
In general, it will take some research and comparison to find the best cheap park home mortgage, but it is important to ensure you get the most affordable and suitable option.
» TAKE ACTION NOW: Compare deals from the UK’s leading lenders
How Much Does a Park Home Mortgage Cost
Several factors, including the home’s purchase price, the interest rate, the loan term, and any additional fees, determine park home mortgage costs.
Since park homes are considered mobile homes and can depreciate over time, park home mortgages tend to have higher interest rates than traditional brick-and-mortar mortgages. Shopping around and comparing different lenders can help you find competitive rates.
Mortgage costs are also affected by loan terms. A longer loan term will result in lower monthly payments, but you will also pay more interest. An arrangement fee, valuation fee, and legal fee may also be associated with a park-home mortgage.
Additional costs can include maintenance, utility, and site fees. You should carefully review the terms and conditions of any mortgage offer and factor in these extra costs.
Secured loans for all purposes
- Stuck paying high interest on credit card debts & loans?
- Looking to fund a home improvement project?
- Dreaming of finally taking the once-in-a-lifetime trip?
Polly
“This was by far possibly one of the nicest experiences I’ve had getting a secured loan.”
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A HELOC Might be the Best Option in Some Cases
A Home Equity Line Of Credit (HELOC) is a way to free up equity in your current home. In some cases, a HELOC would enable you to generate the cash to buy a park home and keep your old home, which you could rent. HELOC rates in the UK are generally lower than personal loan rates.
You can find a HELOC calculator online to determine if this is a viable option.
Legal Considerations
It is important to read the lease agreement terms and understand the park rules before committing to a mobile home. You don’t want to find any nasty surprises in the small print.
Some park rules could include restrictions on subletting, modifying the home or garden, and pets. If in doubt, seek legal advice before entering into any contractual agreement.
References
