Can You Get a Housing Loan on an Old Property?

Oct 03, 2024

“Discover essential factors and loan options for buying an old house”

Owning a residential home is the ultimate ambition for many people, and purchasing a property is a thrilling experience. Some prefer to buy an under-construction home while others choose a fully furnished house. Those with a limited budget may prefer to buy an old property. But the question arises, is it possible to get a housing loan on an old property? The answer is yes, buyers planning to purchase an old property can avail of a housing loan. In this blog post, gain insight into essential factors and loan options for buying an old house.

Housing Loan on an Old Property: Essential Factors to Consider

While it is very much possible to gain a housing loan on an old property, a lender may consider varied factors before approving the loan.

Property Condition: Your eligibility for a housing loan will be greatly impacted by the property's age and condition. The total cost of repairs and renovations may go up for older properties since they may need more comprehensive work.
Valuation: To decide how much of a loan you may avail of, lenders will evaluate the value of the property. The value of older homes may be lower than that of modern ones. You will receive a loan according to the market value of the property. Consider the free valuation service of Estate Agent Power to know the market value of your property.
Energy Efficiency: Properties with low energy usage are becoming more and more desirable to lenders. Modern energy efficiency rules may demand renovations for older houses. Installing eco-friendly devices and appliances can increase the energy efficiency of your home.
Insurance: Because of the possible dangers that come with ageing and wear and tear, getting home insurance for older properties may be more difficult. So, the ability to gain insurance may impact the loan amount on older properties.

What are the Loan Options for Buying an Old Property?

Your financing alternatives may be limited when buying an older property. The following are some possible loan choices to think about:

Conventional Mortgage: Usually provided by banks and building societies, this is the most popular kind of mortgage. When it comes to older buildings, lenders could have certain requirements. For example, they might need certain repairs or improvements finished before granting the loan.
Renovate Loan: Intended to pay for the price of buying an older home and financing the required upgrades. Possibly provide adjustable repayment plans to work around the renovation process.
Shared Ownership: Under this plan, you can buy a portion of the property and make rent payments on the portion that remains. Less deposit is needed than with a conventional mortgage.
Government-Backed Schemes: With a reduced down payment, first-time buyers can acquire an existing property or one under construction thanks to this government program. Explore other government-backed schemes that may be available in your area.

In conclusion, you can get a housing loan to buy an old property. However, the loan amount and term depend on the property's age, conditions, energy efficiency and ability to get insured. Several loan options are available including traditional housing mortgages, renovate loans, shared ownership loans and government-backed schemes.