Funding for Self-build

neasden

My Wife and I are seriously considering self-build. We have a mortgage of £148k fixed with 4 yrs remaining. and £15k savings

Next door just sold theirs for £200k (ours is in the same condition if not better) = ~£50k credit once sold

I plan to buy land for £170k and build for £130k. We jointly earn £73k with no loans or cc = Including monies from sale ~£250k mortgage required (3.5 x joint income)

Can you advise if the following is possible and best?

Take 2nd mortgage £170k - buy plot of land. Take out new mortgage to build at the end of current 4yr fixed (avoiding early repayment charges). Can you have two mortgage brokers lending on the same property because we would opt for a fixed mortgage on the land but would have to have an accelorator mortgage from buildstore to achieve the build?

toonfish

the easiest way to do this would be to buy and build it now, buildstore will deduct the existing loan as a commitment, then port your existing mortgage to the new property when it is complete and your current house is sold. Otherwise you are looking at financing £170,000 for 4 years with no return

neasden

Cheers for the info, you've lost me a little tho!!

When you say Buildstore will port my current mortgage does that mean terminate my existing mortgage so that we have a £250k mortgage with buildstore?

Or use Buildstore for the £170k Land and £130k Build then once complete transfer mortgages?

toonfish

neasden wrote:

Cheers for the info, you've lost me a little tho!!

When you say Buildstore will port my current mortgage does that mean terminate my existing mortgage so that we have a £250k mortgage with buildstore?

Or use Buildstore for the £170k Land and £130k Build then once complete transfer mortgages?

sorry. You take a mortgage for the land purchase and build costs with buildstore, retaining th emortgage on your current property. Then, when the build is complete you refinance the new house to your existing lender one the current property is sold.

neasden

our current mortgage is over 23years with £900 payments per month, I assume a second mortgage for £250k would require payments of £1500, in total £2400 per month which we cant afford. Also, the £250k is based on using the £50k equity on our current house.

Could we sell the house, swap the existing mortgage with NW to purchase the land then take a second mortgage with buildstore to finance the build?

neasden

Can you have two mortgages with two different lenders on the same property?

ds1980

toonfish wrote:

sorry. You take a mortgage for the land purchase and build costs with buildstore, retaining th emortgage on your current property. Then, when the build is complete you refinance the new house to your existing lender one the current property is sold.

hi mate god an ma that makes ense for a change. I was looking into buildstore and thought that they offer a fantastic deal quite high charges but nowhere else will lend you 95% cost and 95% building costs. you should pm this man neasden he'll sort you right out!!