4 Tips For Financing Unique Properties

So, what exactly is considered a unique property?

A unique property could mean many things.  For instance: a converted church, reproduction castles, a container home, off-grid properties, private islands and many more.

There are many examples out there of unique properties that we, as lenders, have seen over the years.  So, what do you do when lenders turn down your otherwise perfect borrower, solely due to the fact that the property is unique?

Deals like these can come down to a matter of ‘packaging’ for the lender. 

Here are 4 tips to keep in mind when putting together deals for unique properties.

1. When the property is a second home, brace the borrower early that the lender will want to blanket the mortgage over their principal residence as well as the unique property.  If there is enough equity in the principal residence, these deals can often be approved.
2. Focus on the strength of the borrower.  Yes, as equity lenders we’re more concerned about the property. However, if the borrower is an extremely low risk, the lender may be able to make an exception.
3. Focus on the value of the land as opposed to the structure built on it.  If the loan-to-value is low enough, you may be able to get an approval based solely on land value.
4. Make sure you stay current on which lenders are taking on difficult properties. Don’t be afraid to ask them for guidance on how to craft the application.

If you find yourself with a client looking to purchase a unique home or property, give the experts at Kokanee Mortgage a call.  After decades of experience in the lending industry, we have seen our fair share of unique property locations.  Not to mention, we have a wealth of knowledge that will help you and your clients to get those deals done.