Flood Affected Properties: What I Need to Know
A home loan exists for most circumstances. For example, properties located in flood zones might qualify for flood-affected properties mortgages. These properties require a different home loan since they face a different set of circumstances that lenders must acknowledge.
Even though homebuyers have good intentions, properties that carry risk can cause a significant loss from the homeowner. Parts of Australia can face flooding from too much rain. For example, New South Wales, Queensland, and Victoria can experience flooding. The same is true for Western Australia.
If a flood wipes out the property, the homeowner remains on the hook for the outstanding mortgage amount. However, since they have no home, they can walk away from outstanding home loans even though it impacts their financial standing.
Thus, lenders take these realities into account. Lenders aim to obtain the bulk of the repayment in the first few years through interest rate charges. They also expect the homebuyer to place a 20% deposit on the property. It’s easier to lend an 80% loan-to-value ratio than 90 or 100%.
Mortgage House is a non-bank lender that issues flood zone mortgages. We take several details into account for every mortgage choice. Namely, we take the occurrence of flooding and start formulating loan terms from that point. Nonetheless, we can provide competitive home loans for properties that sit in less risky flood zones.
Flood Affected Properties Conclusion
Those who have an interest in obtaining financing for flood-affected properties can contact Mortgage House. Our loan specialists take a look at the details of the property and offer some guidance. Contact our team today.