Static Caravan Finance with Bad Credit

Answered on 29 January 2016 by Nick Morrey

I am 51 and my wife is 56, we have had a bad credit rating in the past but are thinking of buying a £35,000 static caravan as an investment. We can rent it out 48 weeks of the year. We have a car loan that is paid off in July that costs us about £250 a month, our house has about 7 years left on the mortgage and we should be able to afford 10% down. I was wandering if it would be possible to get a mortgage for this purchase and if so how much it was likely to cost?

This is all going to depend on how far back in the past your bad credit rating was. If it was over 6 years ago then the chances are that any bad credit will no longer show on your credit file, any shorter period than this then it will depend exactly what the bad credit was and what is showing on your files.

It is not possible to get a mortgage on a static caravan and you would need to consider getting a personal loan from your bank or another provider unless you are willing to use your home as security. Perhaps the simplest and most likely the cheapest option for you, would be to approach your own mortgage lender for a further advance. Depending on the conduct of your existing mortgage, the value of your property and your incomes it is quite possible that they will lend you the money you require without even doing a new credit check.

Monthly Cost

The actual monthly cost will depend on the interest rate offered to you, the term of the new mortgage and whether you decide to pay back the capital month by month or as a lump sum at the end. Your bank's own adviser will be able to supply you with all the details you require.

If your bank is unable or unwilling to help then I recommend you contact an independent mortgage broker. You should advise them what the bank said and also provide them with a copy of your credit file. They will then be in a position to advise you how best to proceed.

As any mortgage would be secured on your home and not the caravan you need to be aware that your home would be at risk if you did not maintain the payments.

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.


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