If you’re looking to buy a property with a Section 106 agreement, it’s important to find the right mortgage lender. A Section 106 agreement is a legal agreement between a developer and a local authority, which requires the developer to provide certain benefits to the community in exchange for planning permission.
What is a Section 106 Agreement?
A Section 106 agreement is a legal agreement between a developer and a local authority. It is used to mitigate the impact of new developments on the local community. The agreement sets out the terms of the planning permission, including any conditions or obligations that the developer must meet. These can include providing affordable housing, contributing to local infrastructure or providing community facilities.
Why You Need a Specialist Mortgage Lender
When you’re looking to buy a property with a Section 106 agreement, you need to find a specialist mortgage lender. This is because not all lenders are willing to lend on properties with Section 106 agreements.
Specialist lenders have experience dealing with Section 106 agreements and understand the risks involved. They will be able to assess the property and the agreement to determine whether it’s suitable for a mortgage.
It’s important to note that specialist lenders may have different lending criteria and interest rates to mainstream lenders. You should always compare different lenders and their products to find the best deal for you.
What to Look for in a Specialist Mortgage Lender
When you’re looking for a specialist mortgage lender for a property with a Section 106 agreement, there are several things to consider:
- Experience: Look for a lender with experience dealing with Section 106 agreements.
- Lending Criteria: Check the lender’s lending criteria to ensure that you meet the requirements.
- Interest Rates: Compare interest rates from different lenders to find the best deal.
- Fees: Check for any fees or charges associated with the mortgage.
- Flexibility: Look for a lender that offers flexibility, such as the ability to overpay or underpay.
How to Find a Specialist Mortgage Lender
There are several ways to find a specialist mortgage lender for a property with a Section 106 agreement:
- Search Online: Use search engines to find specialist lenders.
- Speak to a Mortgage Broker: Mortgage brokers have access to a range of lenders, including specialist lenders.
- Ask for Recommendations: Speak to friends, family or colleagues who have purchased a property with a Section 106 agreement for recommendations.
What to Expect from the Mortgage Process
The mortgage process for a property with a Section 106 agreement is similar to a standard mortgage. However, there are certain additional steps that need to be taken:
- Assessment of the Section 106 agreement: The lender will assess the Section 106 agreement to ensure that it is suitable for a mortgage.
- Valuation: The lender will carry out a valuation of the property to determine its value.
- Legal Process: The solicitor will need to review the Section 106 agreement and ensure that it is legally binding.
- Completion: Once the legal process is complete, the mortgage can be completed and the property can be purchased.
Conclusion
Buying a property with a Section 106 agreement can be a complex process, but finding the right mortgage lender can make all the difference. By choosing a specialist lender with experience dealing with Section 106 agreements, you can ensure that the mortgage process runs smoothly and that you get the best deal possible.