loan for a plot of land

quintwins

we went to our own bank(northern bank) as we assumed they would be more helpful nas we banked with them

however we were told they wouldn't lend us any money at all for a plot of land as they didn't see it as fisable

he said we wouldn't be able to live on site for several years with 3 small kids, however we have considered this and have decided to get 2 mobile homes joined together which would acually be bigger than our last house, and even if we hadn't all ready decided this lots of people live on plots for several years

second he said it would cost us £100,000 to build a house there is no way anyone with sense pays this kind of money, we did point out that we knew a few people who had doen self builds for around £50,000 and as we know several tradesmen we can get mates rates

then he said he would give us a morgage for £80,000 instead and we could buy a town house at auction that needs some work, but this is the last thing we want, to spend the same amount on a house we don't want thats in an area we don't want to live in, that will be worth less in teh long run than building ourselves

we're now trying to save up to buy a plot outright however we would still like to speed things up so any advice on this would be welcome

our whole income after tax is £20,000 (some of which is tax credits)

our current rent is £540 a week (if we could stop paying this while living on site it would be a huge help)

we are married and have 3 dependants

i think the big thing was i'm 23 and my oh is 22 so it was assumed we wouldn't do it as we're young

i have acually been on the budget planner on here, and we have just under £7000 left after all our bills ect, a plot will cost us between £30000-£50000 depeding on size area and planning premmision (we also know someone on the planning board who offered his help) so it would take us atleast 4 years to save for the plot and we would need extra left over for the mobile home and untilities

so i was wondering if anyone could help us with where to look for a loan

sorry that was abit long and sorry if theres loads of spelling mistakes my baby was trying to help

p.s i'm in n.ireland not sure if that makes a diference

myrnahaz

I don't mean to throw cold water over your plans, but have you really thought this through properly? I think your plan to save up to buy the plot is good, because banks rarely lend money for building plots, and you'd then only need to borrow money for the build.
Also, you need to do your sums again, because if the plot is going to be around £40,000, and you've estimated £50,000 for the build, you're talking about £90k, which is £10k more than your bank is willing to lend you.
A self-build mortgage is paid out in stages, and requires a building inspector's sign-off before each stage payment is released, so unless the Irish system is different to mainland UK, you won't be given one up-front lump sum with which to buy land and start the build.
However, your bank manager clearly has no experience of self-build mortgages, so maybe you need to speak to someone who does. Also, have a look at some websites for suppliers of 'kit' houses; there will probably be a lot of information that would be useful to you. There are also 'self-build' exhibitions on from time to time (I only know of the one in Birmingham's NEC), but there must be something similar in your area.
In the meantime, get several estimates so you know what to expect.
My son was your age when he built his house, he didn't have to buy a plot, but his bank manager was a novice (though very supportive) and much time was wasted while she searched for information from colleagues.
Another problem is that mates might charge 'mates rates', but they only do the work in their spare time (and I mean the spare time after both work AND socialising).
The novelty of living on-site in caravans with three small children will wear off really quickly, and the build is likely to take longer than you've estimated, so you really need to get some advice before you start.
However, you seem pretty determined, so good luck.

quintwins

we have thought of nothing else it was something we discussed when going out and discovered we both had the same plans, now 5 years later we still want it just as much if not more

sorry i should have said thats £80,000 + a 10% disposit so £88000, and we could acually build our house for less than £50,000 at a push as aslong as all the structural and utilities are good and long lasting, the finish can be changed at a laster date

we're not acually looking a self build morgage tho, our plan is to get a loan for the land (as we were informed you can't get a morgage for this even if theres a property on it) which we could pay back easily in 3/4 years depending on teh amount, with what we pay in rent now, and in the mean time we plan to build our house with our disposable income, and do it slowly

we have choosen this way for a few reasons first off it will save us in interest, it also means we don't need a huge payout, and we can do some of it ourselves, my oh is very handy and can turn his hand to anything (i'm the most unhandy person ever) also it means we can pick stuff up cheap as we see it, for example we can pick up building blocks ect from struggling contractors, we could even do this now as we have acess to alot of storage, but we have no idea when we'll need it

another reason we have decided to do this is so we won't have a morgage for years, in theory we would own our own home debt free before we're 30, at which point we can save for retirement, or uni for or kids ect

we have acually looked at log cabins, which we do like the idea of, but decided we'd prefer bricks and mortar
and we have been to a self build show last month

we are under no illusion this will be a walk in the park, but we;ve managed in a very small house (which would be similar to what we'd be buying if we accepted the offer of a mortgage) until very recently, atleats this way it will be for a good cause

we acually know several people who have self built however they were several years ago before the banks clamped down on lending

sorry my op wasn't clear enough, i know what i mean in my head but it's hard to get it out lol

quintwins

also i do see what you mean about mates rates, being in spare time, however as we're doing it in bits and pieces there won't be a huge rush to move onto teh next stage

we acually don't plan to be into our hosue for 5years (id we can get a loan that is) as our plan is to pay our loan back and do the building slowly, tehn once it's paid off we will have nearly double the money to pump into it

MsAnderson

If you are buying a plot but need a mortgage, you will need a self build mortgage. You won't be able to get a mortgage for more that the actual land value and land is relatively cheap just now. Once you have the completion certificate, you can remortgage and go with a high street bank if the resultant value is greater than your original mortgage.

Been there, done that. Well worth it, but very stressful unless you employ a spot on architect or project manager. Even then, it is a long, weary journey, but the very best of luck.

dane-katie

We built our own house, on agricultural land (family are farmers) we did it on the cheap on mates rates and "cash" but still cost over 70k and we havent even started on the garden its a mess but its our first house, which we was given and when we have the money it will be sorted slowly.

Planning permission was 7.5k but this included the barns, agricultural land seems to be selling at about 4k per acre around here, have you thought of setting up a small holding?

quintwins

thanks for your advice do youahave any idea where we could look for a self build loan

by small holding do you mean a farm type set up, because we have thought of this, i would love stables and we may have some anyway, and this is how oh's parents got planning premission for there house as at that time they were pig farmers, so we had thought of doing it that way, as it does seem the cheapest option

ILW

I cannot see how it is possible on a total income of £20k with 3 kids to support.

quintwins

ILW wrote: »

I cannot see how it is possible on a total income of £20k with 3 kids to support.

first off i live in n.ireland rent is cheaper here and it includes rates, our rent is £530 pm

out expensese for the month are 410

and our income for the month is 1740

now thats tight and doesn't allow for extra spends like days out, clothes ect which is why we only plan to save £7000

mc33033

I don't think you what you are trying to do is impossible. I know families that have lived in statics and built over 5 years doing most of the work themselves, some due to necessity (ex bankrupts in one case). I do think that your expenses are mad though and need to be re-evaluated, and £280 is nowhere near a family of 5 peoples living expenses.

Really search around for something suitable which isn't on the market and approach people rather than looking at just what is advertised, you can then make a personal appeal, far more likely to get a decent price on something rather than putting a number on a piece of paper and passing it on through an estate agent.

If you can get your budget for a loan down to £25k you can then look at unsecured personal loans, though the cost of utilities could be significant depending on where you are in relation to them. You would have the cost of the static on top of that, and a decent 12ft van will be at least a few k, if you will be in it for a few years you don't want a £500 damp rot box.

Keyham

I'm the daughter of parents who did a self build. We moved into a static caravan on site when I was 12, and my brothers were 9 and 4, and we moved into the almost-completed house five years later. I understood why my parents were doing it and loved the freedom of living in the countryside, but even so, you may want to consider some of what myself and my brothers experienced....

The caravan was freezing, noisy, cramped, and meal times could be very difficult in a tiny kitchen diner. I had no friends to stay over for many years, and even bringing friends back to play was very difficult and rare. Storage was exceptionally limited and I had very few clothes or posessions. My room was big enough for a bed, a very small wardrobe and a very small side table that had room for a clock. Anything else we owned (coats, wellies, bags etc) had to live in a shed which meant they always smelled damp. Homework was done in bed, simply no-where else to do it. Thin walls meant no sound insulation. We were always broke - I was allowed two new items of clothing a year (really) from my parents, while lorries full of building supplies rolled up regularly.

My father was never around, at work in the daytime and every spare moment was spent on the house. School holidays meant helping on the build, carrying slates and blocks, tidying, going to builders merchants. I've grown up with a weird mixture of admiration for what my father acheived and resentment for the fact that it was crystal clear that the priority was the house, not myself and brothers. I am still distant from him.

Now, years later, their priority is still the house. I never really lived in it. We moved in when I was 17 and at 18, desperate to earn a little money and frustrated with the insular life, I moved away. My brothers also moved out pretty quickly.

There's no doubt my parents love their home and have done what they set out to do - they live in a house and location they could never have afforded by 'normal' routes. Please bear in mind though, that your children are not choosing this lifestyle change, you are.