What is the Minimum Acceptable Living Area for an Apartment?
Apartments, especially studio apartments, are becoming a popular form of housing. They are prevalent among young professionals who work in the city. However, even though they are popular, not all apartments can be financed using a home loan. What size apartments do lenders accept, and why are they so strict?
What is a Studio Apartment?
At least, as defined by a bank, a studio apartment is a unit that doesn’t have a wall separating the living areas. The living room, bedroom, and kitchen are all one space. Studio apartments do have a defined bathroom.
Acceptable Apartment Sizes
Every lender has its own guidelines when it comes to the minimum apartment size they’ll accept. While most traditional lenders want a minimum size of 50 square meters, we at Mortgage House will accept a minimum size of 30 square meters.
Why are Lenders so Strict?
There are two significant reasons why traditional lenders are strict with their apartment size requirements. Both reasons are tied to how much risk they associate with these properties. First, most lenders consider small apartments high-risk because they believe these properties are less desirable than larger apartments. Therefore, they will be harder to sell and are purchased for less money. The second reason is that most of these properties are located in high-risk, high-density inner-city areas.
At Mortgage House, we see the value in small apartments, so we accept units as small as 40 square meters. If you need a home loan to purchase a small unit, we can help you find one at competitive rates.