Mortgage free on a new build, is it really possible??

bentleyorchard1984

Hi,

My partner and I have found a brilliant plot of land-it has a ruin on it with all the services connected and is a bank re-possesion going for £120,000.
It would need to be flattened and be a total new build. Which is our dream!!

I am 23 years old, work full time as does my partner who is a carpenter/ builder.
We need advise with regards to getting a mortgage:
-Should we get a mortgage for the actual cost of the plot (£120k) or does it make sense to get it for a larger amount to encompass the building costs?
-Does it make more sense to get a mortgage for just the £120k and gradually build bit by bit ourselves as we plan to live on site in a caravan? Plus this would really utilise my partners skills and keep building and material costs to the lowest possible. So in theory only having a mortgage for the property cost and not the building cost.
-Has anyone used specific lenders for new builds?

I know this sounds pretty vague and simple but if anyone has had any experience with getting mortgages for new builds, living on site, great lenders, green grants, architects etc etc (Im babbling...)

ANY help?
Thank you SO SO SO SO much!!!

Phelpsie001

I'd speak to a bank (any bank) to get advise on this first. I don't think that you can get a conventional mortgage, to knock the house down? i.e. if you fail to repay the mortgage, there is nothing for the bank to repossess and sell to get its money back?

I might be so wrong, but I'd say to just ring a bank and ask for advice from the horses mouth Sorry if thats not too helpful?

getmore4less

Do you have any money?

wynnvegas

Perfectly possible - we're going to have a good crack at it over the next five years or so. Phelpsie is right. Financing the plot is going to be your trouble. We're looking at plots at the moment and the banks are all refusing to lend to us based on the plot alone as "it's currently just a field" to them. They will currently only lend us on 70% of our existing equity which is comes to around the £115-120k mark. Unless you have the facility to borrow £120k, you're going to probably need someone to guarantee the land purchase.

When you do have your plot, there are specific mortgage products for new builds which will release funds at different phases of the build to try and limit the interest you're going to be paying. We're hoping to buy our plot outright (around £30-40k) pay as we go along for planning submissions, architect fees etc and save like crazy over 3-4 years to get the initial phases of the build done without a mortgage. A the back end, we're hoping the sale of the existing house will be able to take care of any bridging mortgage that will be needed tO finish the new build.

Best of luck to you.

Cheers,

Billy