Flood Affected Properties and Flood Zone Mortgages
Homes in Australia sit in various natural conditions. Australia experiences heatwaves, severe storms, and tsunamis. That’s why home insurance is so important. In case of a natural disaster that impacts your house, coverage helps the homeowner recover some losses.
Lenders pay close attention to natural conditions that impact a home. For example, they check if you’re looking to purchase a house near flood-affected properties. Lenders do provide mortgages for these properties. However, they have some caveats built into them.
When you apply for this mortgage type, expect the lender to explore the flood probability of the property. If it occurs once every 100 years, the property is in good condition. Of course, 1% can occur without warning. Nonetheless, it indicates that the risk is minimal. If the home resides in a 1% flood zone, a home buyer can expect to receive up to 95% of the property’s value.
If flooding occurs once every 50 years, the lender finances up to 80% of the property’s value. When flooding occurs once every 20 years, it’s too much risk for the lender. Thus, it’s a difficult loan to obtain. Applicants who bring a guarantor with them can obtain 100% financing under some circumstances.
Mortgage House loan specialists can help homebuyers understand the risks of the home in terms of financing. We also offer online tools such as the mortgage calculator.
Flood Affected Properties Conclusion
Homebuyers interested in obtaining a home loan for a house in flood-affected properties can contact Mortgage House. Our loan specialists have tools to assess the opportunity for the homeowner.