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Church conversion mortgages

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Feb 6, 2023

How to get a mortgage on a property that used to be a church in the UK

Many people dream of living in a converted church, especially if they want something different. How do you purchase a converted church? Can you get a church conversion mortgage? What type of mortgage are you required, and what financing is needed if you want to convert one yourself?

We answer all your questions about church conversion mortgages. Plus, you will learn how the right broker can help you reach your goals.

Enquire below, to begin with, an online mortgage advisor. We have a few mortgage providers lending a church conversion mortgage.

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Is it possible to get a mortgage for a church that has been converted?

Yes, absolutely. If you want to purchase a converted church for residential use, it is not much different from getting a mortgage on a regular home or flat. You should be aware of potential pitfalls and other things to be mindful of. Converting a church is possible, and a church conversion mortgage is available on the market.

The mortgage process to buy an existing converted church is the same as for any other residential property. The lender will evaluate the strength of your application using the same factors. Keep in mind, however, that you may end up paying a higher interest rate than you would for a traditional home.

Why interest rates could be higher

Ex-church properties are more vulnerable than other types of property. First, many of these properties have unique features that fall under the category of ‘nonstandard’ construction. This can lead to specialist lenders being required. Depending on the specific nature of the property, they may only approve you for a higher interest rate to offset the risk.

Another reason rates may be less favourable is that many decommissioned church properties are listed buildings. This could limit the number of lenders you can approach depending on the property’s grade.

Not all mortgage providers will lend to listed buildings. While some lenders might agree to caveats, finding a mortgage that suits your needs and requirements can be more difficult.

An easy and quick way to lower your interest rate and get the best mortgage deal is by contacting a mortgage broker.

Mortgage brokers specialising in non-standard properties, listed structures, and church conversions have strong working relationships with lenders who can offer you the best rates for these types of property.

We provide mortgage advice free of charge and match you with a mortgage advisor to suit your needs.

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Requirements to obtain a mortgage for a church that has been converted

To ensure that you meet the eligibility criteria of your mortgage lender, any person who intends to purchase an already converted church property for residential use should verify the following:

  • Planning permission You may have planning permission if you buy a property from a church that has been converted to residential use. However, it usually expires after three years. If you plan to make any changes to the property before or after moving in, you might need to apply again.
  • Listed Building Consent: This consent will be required if the church is a listed structure. This can be obtained from the local authority.
  • Church approval: Before a church building can be used for residential purposes, it must be completely decommissioned (or deconsecrated). If the property being purchased is not yet converted or has never been used residentially, this might be an issue. This will require the creation of a draft pastoral plan.
  • Additional lender requirements Some mortgage lenders have their restrictions regarding church properties. Some lenders won’t lend to property that is located near a cemetery. Other lenders may require additional scrutiny from underwriters to ensure there aren’t any deal-breaking issues or legal rights to purchase the property.

While there are many additional steps and considerations when purchasing a converted church property for sale, it doesn’t mean that your mortgage application should be complicated or overwhelming.

Is it possible to convert a church into your own house?

There are financing options for those with the financial means to either convert or supervise the development of a church property into a residence.

A self-build mortgage is one of the most preferred financings for residential church conversions. These mortgages are for those who wish to do their development work. This is also called development finance. These mortgages work the same way as standard residential mortgages, except that the funds are released at crucial stages of the development process, and the interest rates are generally higher.

You will need to have a self-build mortgage or development finance in place for a church conversion.

  • Development experience
  • Permission to plan and consent for listed buildings
  • Approval by the church body
  • Minimum 20% deposit

Specialist lenders are the only ones who offer self-build mortgages and development finance. The eligibility criteria can be pretty strict for development finance. Brokers specialising in self-build finance can help you increase your chances of approval by matching with the right lender.

An expert broker can help you obtain a self-build loan for converting a church. This is even if you have little or no experience in development and a deposit of less than 20%. They are familiar with the best self-build mortgage lenders and know which ones are more risk-averse.

Most borrowers will remortgage to a standard residential agreement once the development work is completed. You can also get help from a broker to ensure you get the best remortgage rate and the best deal possible.

While a self-build mortgage is the most popular form of finance for DIY church renovations, other options exist.

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Continue reading to learn more.

The right finance

A mortgage is usually the best option if you want to buy a property from a church that has been converted to residential use but doesn’t have enough funds. Another option is to remortgage another property to free equity to purchase the church property. However, this is not an option for everyone. To have a mortgage approved, speak with a specialist broker who will introduce you to a mortgage lender for a church conversion mortgage.

Borrowers who want to renovate a church in their own homes may have more options.

These include…

  • Remortgaging property you already have: If your property is not being developed and you don’t want to lose it, remortgaging might allow you to free up that capital.
  • Bridging Loans: These short-term, interest-only mortgages can be arranged quickly. These loans can be used as an alternative to a mortgage that you have to purchase the property quickly, don’t qualify for a mortgage to build, or require a small amount of capital to develop the property.
  • Personal loans A personal loan is an excellent alternative to a mortgage or any other type of borrowing that cannot be used for large amounts.
  • Developer finance: If you want to buy a church, this is a good option. You could also turn it into a buy-to-let property.

These are just a few of the possible mortgage options for church conversions. A good mortgage broker can discuss these options with you and offer advice to help you decide which option to choose.

Potential pitfalls

These are the dangers of church conversions.

  • Problems with the building: It is not unusual for decommissioned churches to have structural issues or other problems. Experts recommend you find a specialist in this property type to understand what to look out for thoroughly.
  • Access rights and restrictive covenants: The relatives of the deceased who were buried in the church you are buying will still be able to visit their graves. Restrictive covenants might also be in effect to restrict any alterations to the property’s exterior.
  • Planning application fees: You might need to file a planning permission application if you want to make additional changes to your property. This is not free. It is essential to ensure that the property meets your expectations before you move in. Further renovations may incur additional costs.
  • Higher interest rate: This possibility has been discussed before. You might have to apply for a specialist lender if the church you buy is not of standard construction.
  • Higher insurance cost: Often, the cost of covering your buildings and contents can be higher because of the structure and risk that the insurer takes in insuring the property.

These pitfalls are another reason to talk to a broker before applying for a mortgage to finance a church conversion. An exclusive mortgage expert will help you to identify all possible risks and take the necessary steps to protect yourself.

Talk to a broker that specialises in church conversions

Before you move forward with your plans, speaking to a mortgage broker specialising in financing church conversions is a good idea.

This will increase your chances of getting approved for a mortgage and help you to get favourable rates.

Our mission is to ensure that everyone gets the best mortgage advice and is introduced to a lender whose lender criteria they meet.

We offer specialist finance for converted churches. Even if you have other debts or bad credit history, we can help.

As with a residential property, you must show bank statements, approximate annual income and credit history.

Enquire with the link below to establish an online mortgage advisor for converting churches or commercial mortgages.

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