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SUMMARY: Buying a removal home is a fantastic alternative to building a home from scratch. Why build a new house when you can recycle an older home with character for a fraction of the price? Unfortunately the banks don't agree! Read on for answers to some common questions about borrowing money for a removal home and some nifty industry links to help get you started!What is a removal home anyway?
Removal homes or relocatable homes are normal houses that were not originally built with relocation in mind, but can be moved with specialised tools & trucks. Often they are sturdy older Queenslanders with good frams that can be lifted off their stumps with hydraulics. Removal homes are sometimes cut into section to make transport easier and then reconnected when at their new site. Once they have been moved they are permanent just like any other house!
Help! My bank doesn't want to know me!
Most banks and mortgage brokers are not familiar with removal homes. Most people make a few dozen phone calls to various lenders only to be told no time and time again.
Banks most often think that a removal home isn't a permanent structure, so lend only on the land value. Other lenders perceive them to be a higher risk and limit the amount you can borrow or charge a higher interest rate.
Sometimes there can be a cash flow problem where the lender will not advance the money for the house until the house is on site & connected to the utilities. The problem is that you can't get the house on site until you pay for it! As far as the lender is concerned, this isn't there problem.
Once a removal home is on site and complete there are usually no problems getting a loan because there is no major difference between a house that has been moved and one that was built on that site. You will only run into trouble if the house isn't a permanent structure, or could easily be moved again.
So what should I do???
1. See if you can borrow just using the value of your land. This works well if you are well off.
2. Get a guarantor or family member to help out until the house is on site.
3. Talk to a removal home loan mortgage broker.
4. Negotiate to see if you can pay a small deposit, and pay the rest once the house is on site.
5. Borrow using a different property as security.
6. Use short term financing such as credit cards and personal loans to pay for the house then refinance these debts into a home loan when the house is on site.
We strongly reccommend that you talk to your bank or mortgage broker before taking any of these actions. As you can imagine this advice is general only and is designed for people living in the US, UK & Australia so it may not work for you.
The tips to buying a removal home.
1. Do your homework!Moving older houses is a specialised trade and you'll need advice from an expert. Get a building inspection to make sure there aren't any expensive surprises. In South East QLD there are companies that specialise in removal homes that can assist you further.
2. Don't spend all your dough
With any construction or removal project it is important to have a contingency just in case you go over budget. You need to have funds left over to reconnect services, do a little landscaping and any other bits and pieces left over.
3. Is your site suitable?
Not every piece of land is suitable for a removal home. You may be too far away from where the house is, increasing your transport costs. If the land is remote and has poor access then the trucks may not be able to get the house to your land. In other cases the building site is too steep.
4. Keep your renovations in character
Removal homes are typically 50 years + old and are built in a different style to modern houses. Make sure you think carefully about any renovations you carry out so you don't end up doing more harm then good.
5. Be patient
While dealing with real estate agents, removal companies, your lender & council there are bound to be delays. Don't expect to get everything done in a few weeks, talk to your mortgage broker, council & removal company to find out long everything will take. If you can do your preparation on time then everyone else will work harder to help meet your deadline.
6. Get professional help
Use an experienced, professional removal home company to help you make your decisions. You'll probably only move one house in your life but they've been doing it for years! Find a removal home mortgage broker to sort out your removal home loan.
Links to the experts
- Drake Removal Homes (Australia)
Drake is a family company with plenty of experience moving houses around the South East QLD & Northern NSW regions. They can help with selling, buying or moving a removal home. - Transportable Home Finance (Australia)
Specialist Mortgage Broker & Lender that can help approve removal home loans. Free Australia wide service. - Australian home loan news
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