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Mortgage Advisor & Director
Can I get a mortgage for a care home?
Yes, whether you're looking to buy a care home or remortgage your existing care home, there are specialist lenders who operate in the care sector.
As a whole of market broker, at Teito, we have access to thousands of deals from hundreds of lenders, including those who specialise in commercial mortgages and the care sector. Our experts have helped many people like you to get the best deal on their care home mortgage, get started now, and we promise to make your mortgage journey as stress-free as possible.
Who is eligible for a care home mortgage?
Lenders will primarily be interested in your involvement in the sector, and ideally, you'll have at least two years of experience in a senior management position in the industry. Formal qualifications are also a common requirement.
Suppose you are reliant on others for the day to day management of the setting. In that case, mortgage providers will be keen to learn of their experience and qualifications, and the steps you've been through during the hiring process to select the team.
Lenders will also generally be looking for a minimum of two years of accounts of the care home you're looking to buy.
As a relatively niche mortgage requirement, we would recommend engaging an experienced broker not only to recommend suitable lenders and boost your chances of a successful application but also to find the best rates.
How can I remortgage a care home?
To remortgage your care home, prospective lenders will be interested in a few factors before approving the application.
- The Care Quality Commission (CQC) report rating of the care home will need to be of a 'Good' standard as a minimum.
- The care home should be meeting the required occupancy rates to be considered, as low occupancy rates will impact on profitability.
How much deposit will I need for a care home mortgage?
You can expect to contribute a larger deposit for a commercial mortgage than for a residential mortgage, as the lender is seeking to mitigate the risk of lending to businesses.
Deposit requirements are generally in the region of between 20-40%, depending on the type of business and the associated level of risk. For care home mortgages, you can anticipate being towards the upper deposit requirement. Past financial performance, credit rating and the strength of the application in terms of business strategy will have an impact on the loan amount offered.
Can I get a care home mortgage with a bad credit history?
Securing a care home mortgage with bad credit is undoubtedly more challenging. However, not all bad credit is created equally, and lenders will be concerned with the age and severity of the credit issue.
You may find that with a specialist lender and higher interest rate that you are still able to secure a care home mortgage with bad credit history; our advisors can help.
Can I get a bridging loan to buy a care home?
Bridging loans are a type of flexible, short term finance that can be arranged very quickly.
As you may expect with a short term finance option, the rates tend to be higher, and you will need a clear exit strategy for when the term finishes; which is likely to be a standard mortgage.
Can I get development finance to buy a care home?
If you're looking to finance a care home development project, either a build or refurbishment, development finance could be a viable option to consider.
With development finance, the funding is released in phases to align with the project, and you will only pay interest on the amount deposited so far. As with bridging finance, development finance is a short term option, and you will need to consider the future financing of the project once it is complete; which is likely to be a mortgage.
Learn more and apply now
As a whole of market broker, our team have access to more than 20,000 mortgage deals, including those offered by lenders specialising in care home finance. Get started today, and we promise to make your mortgage journey as stress-free and straightforward as possible.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.
