Buying Land (to build a house) with morgage?

mstar

Hello guys

My local council is selling some rare land on my street (which will be given planning permission for a house) the problem is i do not have the cash to purchase it outright. I was wondering can i still purchase the land with a morgage from my bank etc? or do banks not lend for land purchases? the land is inbetween houses (well corner plot) council has said no problem for planning.

I estimate to purchase and BUILD the house i will need 170k (my grandad is a builder :-)) can the morgage lender treat this just like another lending decsion? but without a physical house on the land?

the estimate resale value for the house is 300-350k for a 5/6 bedroom.

Dead_Eye_Jones

give 'em a ring

DavidHM

I'm sure they'll score it differently but there's no need for a land to have a house on it to grant a mortgage over it, but if you meet their lending criteria and they're happy with the land as security, there's no legal reason why they can't make a mortgage offer. (Of course it's the bank's decision as to whether they actually want to do so).

Seen_the_light_4

mstar

We bought a plot a couple of years ago. Skipton Building Society offer a special mortgage to buy land. The company we went through was Buildstore who gave a very professional service, they are at https://www.buildstore.co.uk.

When the land goes up for sale I'm sure there would be a lot of interest so you will probably need to pay above the asking price. We offered over an additional 10%, but wanted the land to design a house to our requirements which has resulted in a great house that everyone comments on.

Good luck.

Alan

mstar

hi Alan,

thanks for your reply. The land has outline planning and the council (who own the land) see no problem for 1 dwelling on the land. As i have to complete within 28 days is it normal for the lender to take awhile releasing funds? i am putting in 1/3 of the asking price from my own savings, the rest from the lender.

Seen_the_light_4

It can take some time to process a mortgage application. There are experts on this site who will be able to give you an idea of how long.

You shouldn't have a problem getting a mortgage, but 28 days to completion looks tight.

mstar

yes i know 28days seems tight. Does Anyone know is it anyway i can at least get the funds from the lender for just the land purchase (with planning but not funds for actual building house work) i know for self builds they give the funds in phases of the development.