Self Build Mortgages
If you have brought land and have planning permission to build a property, then you can potentially obtain finance to build your own home either to rent or to live in.
The funds for the build are released in stages. Different lenders work in different ways.
For example, some lenders will lend you up to around 80% – 85% of the land value so you can put foundations in, then a surveyor the lender instructs (paid for by you of course!) comes to value the land with foundations, the lender will then give you an extra 80-85% of what the increase in value is so you can build to the next stage which in some cases is to get the property water tight. A surveyor will come out to value the property and the lender will lend you further money up to 80-85% of the extra increased value since the last stage so you can finish the build off.
Some lenders release funds up front and release funds in 3 stages and some release in 5 stages.
Some lenders however want you to get to the first stage i.e. get the foundations in then they release money once the work has been done.
All mortgage companies will require some form of guarantee when the property is built to ensure that if there are any major problems they will be rectified. The normal guarantees are things like NHBC for example and the property will have to be signed off by a fully qualified architect.
Which lender is suitable for you depends on what you need and what your circumstances are so best Get in Touch to find out what is applicable for you.
TIP: Please be aware there may be tax implication with building your own home as well as benefits you may get i.e. VAT back on materials etc so please speak with an accountant or a tax expert to fully understand your liability and potential complications or benefits.
Self Build Mortgages Q&As
Receiving your stage payments in advance during the project will ensure that cashflow is not an issue during the build so you can continue living in your current house until you are ready to move.
Similarly, arrears based self-build mortgages are also available from several different lenders offering a variety of terms.
Mortgage products change on a regular basis so call us to find out what deals are currently available to you.
If you do have savings however or access to other cash, then you may prefer to use an arrears stage payment mortgage. Whatever your circumstances our advisers will find the best product to suit your needs.