new build - is it difficult to get a mortgage?

hamblettamaud

i have a small plot of land with full planning permission.

please could someone let me know whether or not it's difficult to secure a mortgage to complete the build. i already have a £100,000 mortgage and hope to sell my current house for £150,000.

the construction costs would, i estimate, be approx £150,000. any mortgage would need to be arranged within three months in order to get a refund of halifax's exorbitant cancellation of mortgage fee.

zone

What type of property are you planning to build? And do you have any potential buyers lined up etc?

Premier_2

Yes mortgages are still available subject to status (and that usually means a hefty deposit nowadays!)

The other problem you have is you are building the property yourself, so the best you can expect is for the mortgage company to relese funds in staged payments i.e. you build to a certain stage and then they release some funds.

Do you have the working capital to do this?

Is the £100k mortgage on your current house? (which you plan to sell for £150k) Obviously this will affect the amount you can borrow unless you sell the existing house first. £50k isn't a great amount of working capital, but might be enough depending on what you are building, but where are you going to live in the meantime? Even a caravan on site would eat up 10%+ of that amount.

Or is the £100k secured against the land? If not, you might be able to get a loan secured just against the land to get you started - the amount will obviously depend on the market value of the land itself.

hamblettamaud

thanks, premier, for the advice. i don't need to worry about where i live in the meantime - i have supportive relatives. but even so, £50k isn't a lot of working capital. i will need to discuss with my lender. still, it's good to know that in principle these self-build mortgages are still available.