What does Geographical Restrictions mean?

A geographical restriction, pertaining to mortgage lending means that a lender will actually not agree to offer you the loan for a property which is situated in an area exposed to high risks (such as flood, earthquakes, landslip and other).

Bear in mind that up until the very last payment towards your mortgage loan, the lender is perhaps even more interested in your property than you are, practically waiting for the moment when you default on your loan and then he becomes the rightful owner of it.

Another form of protection the lender may ask is the buildings insurance, which again works to safeguard the property and its value in case an unfortunate event occurs.

On the other hand, a geographical restriction is also the term defining the fact that a lender will not make you eligible for the loan, if the property is situated somewhat outside their area of operating. This is again a safeguarding measure for them, but usually applies to smaller lending companies whose activities are not yet so extended, thus they try to stay away from as many risks as possible.