Residential park homes offer a competitive alternative to conventional bricks-and-mortar bungalows, not least because of the sense of community and security they bring, but also due to their competitive pricing. Downsizing to a park home, retirees can release equity from their current property while benefiting from a brand-new home designed exactly how they want it.
For others, however, the appeal of park home living may be for different reasons. All-round more affordable to buy and run, they are perfect for retirement, but what if buying outright still isn’t an option? Renting park homes is ruled out, but what about finance?
In this article, we will explore the options for financing a park home for retirement.
Straight To The Point: Can Park Homes Be Financed?
Park homes cannot be financed through the traditional methods of purchasing a bricks-and-mortar house, i.e., by mortgage. Legally defined as ‘mobile homes’, they’re considered personal property and are deemed a ‘chattel’ by law. So clearly, financing a park home works differently from the conventional routes for financing a home, but there are options.
Finance Options for Park Homes
The most obvious routes available to somebody wanting to buy a residential park home are through:
Personal loans
Personal loans are available by approaching your bank. A bank may be willing to offer you a loan, provided they are assured that you meet their criteria and that you have the means to pay back the loan over an agreed duration.
Specialist lenders
Whilst mortgages are unavailable for park homes, specialist lenders such as Pegasus help people raise funds in order for them to be able to buy a park home. A specialist lender will almost certainly consider the credit history of an individual wanting to finance a park home, but will also likely consider the reputation and standards of a park home development. Parklands of Lincoln for example is a residential licensed development and has a good reputation locally and nationally.
Pegasus, for example, offers loans allowing you to borrow 100% of the sale price with no deposit required, at exclusive rates starting from around 9.9% APR, and flexible terms. These can be secured against the park home itself or unsecured, depending on the product, with eligibility based on factors like creditworthiness, income, and sometimes homeownership status as a risk assessment tool.
Equity release
As we touched on earlier, the most common way for people to buy a park home is outright. As people approach retirement, it often ties nicely with the end of their mortgage term on their existing house. With the capital held in their home, they’re able to downsize into more affordable accommodation such as a park home and have capital leftover so that they can make the most of their retirement.
Although the structure for buying a park home is different compared to a bricks-and-mortar home, it may still be advantageous when you consider their affordability compared to conventional housing. Moreover, stamp duty is not applicable to park homes, thus creating bigger savings.
What To Consider Before Financing A Park Home
Specialist lenders and personal loans typically apply a higher interest rate than that of a comparative mortgage term, so you’ll naturally need to consider your options carefully to make sure the sums add up. As you get older, it naturally becomes more difficult to secure finance, particularly if you’re looking for long-term options. If you can afford to buy one outright, that’s what we recommend, but short-time financing may be a viable option to consider.
There are alternative ways you can go about buying a park home on a smaller budget without finance. Used park homes are always an option, and although that means they won’t be made to your specific needs and wants, adjustments can always be made. There are many companies out there that specialise in the refurbishment to really make it yours.
Final Thoughts
Purchasing a park home with finance is achievable, and choosing a reputable and residential licensed park such as Parklands of Lincoln, using reputable credit services, means that obtaining the funds to buy a new park home may not be as difficult as you first thought.
Not sure if park homes are right for you, or eager to find the perfect development to retire to? Come and explore Parklands of Lincoln, a residential park home development in Lincolnshire, and see what you think. Tucked away just by RAF Waddington and surrounded by all the essential local amenities, it’s the perfect place to retire.
To learn more about us, get in touch today. With vacant plots available, you could have a park home built just for you on our site from just £190,000.
