Mortgage lenders are reluctant to finance unusual residences because they are difficult to appraise, and if they should fall into foreclosure, they are tough to sell, according to themoretgagereports. The article includes a manufactured home with a couple of barns on ten acres as an unusual asset to evaluate, and that’s because determining real estate values is very much based on the value of nearby residences.
If you build a house with straw bales, old tires or cans filled with concrete, make sure there is a green something similar nearby against which it can be valued, or be prepared to get turned down for a mortgage. Lenders will look away. No problem if you pay cash.
The same may apply to log homes, but they are dependent on location and the home’s construction. Comparisons are more prevalent in northern Wisconsin or Maine where there are log cabins that have sold. Without comparables, an appraiser may reduce the value, which will increase the down payment for the buyer, as MHProNews understands.
Building a do-it-yourself log cabin kit home may be very tough to obtain mortgage approval.
Mortgages for the residential part of a mixed-use development may be obtained providing the square footage of the commercial area does not exceed 25 percent of the total square footage of the building.
Out of the ordinary homes with unusual floor plans such as the kitchen and dining room on different floors, or peculiar architecture, will likely be difficult to value, and whenever that happens, the lender will under value the home because they are to tough to sell.
Finally, any residence of less than 400 square feet cannot be called a home, and thus will not garner a mortgage. Additionally, it must be properly attached to a foundation, be taxed as real estate, and pass local building codes. ##
Article submitted by Matthew J. Silver to Daily Business News-MHProNews.