Buying a home is a major investment and undertaking. Oftentimes, the search for the perfect house can be long and arduous – but what if you find a house that you love… except it doesn’t have a kitchen? It may seem like an impossible task, but finding a mortgage for a house without a basic kitchen is actually possible.
In this article, we’ll explore the residential mortgage process without a kitchen while increasing your chance of mortgage approval.
What is a mortgage without a kitchen?
A mortgage without a kitchen is a loan taken out to purchase a home without an installed kitchen. The home may have been built without a kitchen, or the existing kitchen may have been removed. This type of loan differs from traditional mortgages in that lenders must take extra precautions to ensure that the borrower has acceptable loan purposes and will repair the property so it’s suitable for residential purposes. To qualify for this type of loan, the borrower must provide evidence that the home can and will be repaired to include a kitchen.
The issue with a mortgage for a property which doesn’t have a kitchen is certain lenders may deem it an uninhabitable property which can raise alarms with mortgage lenders and complicate the mortgage lending process.
Tips for Mortgage Application without a Kitchen
Making a mortgage application for an ‘uninhabitable property’ requires some extra preparation and research. Here is some mortgage advice to help you get started and increase your chance of approval:
• Check your credit score and make sure it is in good standing – practice paying off your credit card overdraft
• Gather information about the home, including an appraisal and estimate of renovation costs
• Ensure you will be able to make the renovation – ensure there isn’t a poor condition of the property, look out for structural issues or any permanent damage like water damage for example – structural damage can be an expensive project to fix. You should also ensure there aren’t any legal issues such as building regulations or restrictive covenantsLegal agreements that restrict what the borrower can do with... which may stop you from being able to make the house habitable.
• Be prepared to provide detailed plans for the renovation project
• Have extra money – mortgage funds saved for both the down payment and closing costs
Types of Mortgages for Houses without Kitchens
There are several types of mortgages available for a property unmortgageable currently. The type of loan product chosen will depend on the borrower’s individual circumstances.
A standard mortgage is a conventional loan taken out to purchase a house without a kitchen. This type of loan requires the borrower to provide proof that the home can be repaired including a kitchen. The lender will also require an appraisal of the property, as well as an estimate for repairs required to include a kitchen. The amount of money borrowed must be sufficient enough to cover both the cost of the home and the repairs.
Conventional loans are the most common type of mortgage used for homes without kitchens. They are available to borrowers with good credit and an adequate down payment. Because a kitchen is not installed in the home, mortgage lenders may require additional documentation regarding the plans to install one.
House renovation Mortgage
A house renovation mortgage is a loan product that can be used to purchase a home without a kitchen and finance renovations to include one. These types of mortgage products are offered by many lenders, and they typically require the borrower to provide detailed plans for the extensive renovation. The personal loan amount must be sufficient enough to cover both the cost of the house and the renovations required to install a kitchen.
Non-Standard Construction Mortgage
Non-standard construction mortgages are designed for those looking to purchase a home without a kitchen. These types of mortgages are specifically tailored to meet the needs of borrowers in this unique situation. The loan amount must be sufficient enough to cover the cost of the home, as well any repairs needed to install a kitchen. Mortgage providers may also require additional documentation regarding the plans to install one.
Un-mortgageable Property Mortgage
An unmortgageable property mortgage is a loan taken out to purchase a house that cannot be mortgaged due to its condition. This type of loan is typically used to purchase homes without kitchens, as lenders are not willing to provide traditional mortgages on these properties. The loan amount must be sufficient enough to cover the cost of the home, plus any extra kitchen repairs. As with other types of loans, mortgage providers may require additional documentation regarding the plans to install one.
A bridging loan is a short-term loan taken out by a borrower to finance the purchase of a home without a kitchen. This type of mortgage product is typically used when the borrower needs to close on the purchase quickly but does not have enough money saved for the down payment or closing costs. The loan amount must be sufficient enough to cover both the cost of the home and the repairs required to include a kitchen.
Required Documents and Credit Score
When making a loan application for a UK mortgage without a kitchen, mainstream mortgage lenders will require certain documents to assess your financial situation and creditworthiness. This is consisting of salary proof of income, such as payslips or tax returns; proof of addressEvidence of a borrower's current address, such as a utility ...; bank account statements; and other financial documents and personal details that make up the eligibility requirements. This is where lenders determine your borrowing potential and maximum borrowingThe maximum amount a borrower can borrow. figure (usually 4 – 4.5X your annual income)
Your lender will also need to evaluate your credit rating before agreeing to a loan term with structural issues. Generally, you should have a clean credit card history to be approved. If you have a bad credit rating, this will raise alarms with mortgage lenders therefore they will assume your financial position isn’t secure. Additionally, your lender may require you to provide additional suitable security, such as a guarantorA person who guarantees to repay a mortgage if the borrower ....
It is important you pass the mortgage affordability assessment because the lender wants to ensure you come under the affordability criteria, this includes your monthly outgoings and your actual income. Having a low debt-to-income ratio is important to lenders. This is your monthly outgoings divided by your total monthly income. A low debt-to-income is a great sign in the mortgage lending process as it can prove you meet the mortgage eligibility criteria and will undoubtedly increase your chance of mortgage approval.
Getting a mortgage for a house without a kitchen is possible, however, the lender will need to be sure that you can afford the loan and that the property is safe to live in. It is important to remember that lenders are more likely to approve a mortgage when they have assurance of your ability to repay it and that the property meets their standards. It is advised to do thorough research into what lenders offer before applying for a mortgage for a house without a kitchen and make sure you have all the documents needed to make the process as smooth as possible. You can also get help from a specialist mortgage broker who can help you with your application process.