Self Build Mortgages and Funding
There are quite a few lenders who support self build mortgages and they will lend in all areas of mainland UK. In essence they all work in the same way – an initial loan to assist the land purchase, followed by further loans, or draw-downs as they are more commonly known, at various stages throughout the build. The typical stages are listed below. Stage 1 – site clearance, services laid into the site (gas, electric, water, drains) and foundations. Stage 2 – all walls built up to wall plate level Stage 3 – roofed-in and weather tight (all windows and doors fitted) studwork fixed Stage 4 – first fix of plumbing and electrics and plastered out Stage 5 – second fix of plumbing, electrics and carpentry, central heating fitted, kitchen and bathroom fitted and decorated out
Normally the draw-down of funds are made available at the end of each stage. This is known as stage payments in arrears. However, once stage 1 is finished, funds start to flow. It is rare to find a lender who will fund the build via stage payments in advance.
The maximum funding of a self build project is 85% of the land purchase and 85% of the cost of each stage. However, most lenders lend far less than this, as self build projects are regarded as high risk lending. It is surprising then that lenders do not charge high rates of interest, or high arrangement fees.
Applicants do not need any experience, as in the main, a team of professional builders will be employed, or at least individual tradesmen contracted in to do the work. The finished property will need an architect’s certificate, but it is best to buy a new build warranty scheme, as the property will always be suitable for future mortgage lenders.
For more information call us today and speak to our expert mortgage advisor.
Telephone 0117 2232 050