Converted churches, reproduction castles, container homes, off-grid properties, private islands and more. We’ve seen them all, and the longer a broker is in this business, the more of them they’ll see. So what do you do when lenders turn down your otherwise perfect borrower because of the property?
This is a matter of packaging the deal differently for the lenders. Here are 4 thoughts:
Where these are second homes, brace the borrower early in the conversation that the lender will want to blanket the mortgage over their principal residence as well as the unique property. If there is equity in the principal residence, these deals can often be approved.
Focus on the strength of the borrower. Yes, as equity lenders we’re more concerned about the property. But if the borrower is an extremely low risk of default, the lender may be able to make an exception.
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 on land value only.
Make sure you stay current on which lenders are taking on difficult properties, and don’t be afraid to ask them for guidance in how to craft the application.