Self Build funding

Begbroke

Hi I have purchased a habitable bungalow on a very large plot and now have permission for house and extensive out buildings . I have funded to-date everything with out borrowing but now want to get the new house built faster .
The question is - Is there a lender who will take the whole situation into account namely the current bungalow and land is worth over £500K and I want to borrow £200K for the new build and then demolish the bungalow . I will have further funds in 1-2 years so want repayment flexibility so I can reduce / pay off the mortgage .
As the borrowing is much less than 2X salary I feel this should be straightforward .
I have been told I need an expensive self build mortgage but feel that the bungalow is mortgagable and only goes when the new house is occupied and the new house will be worth > £1M so do not see why I need to have a high rate self build loan - Any suggestions

holly_hobby

You won't secure a resi mge on this with your current plan, given that the lenders security and charge is on the bungalow, which you say is to be demolished and replaced by a new build unit.

The new build will have new title deeds and registration - and to close down the bunaglow mge and release charge, and effect anew charge on the new build, will not be a simple transfer, but essentially new lending which will require you to repay the bungalow mge, whilst you may not qualify for a new mge status wise at that time - so that is their and your quandry TBH.

Plus their concern will be if you default on the bunaglow mge, whilst the new build within the property boundaries is incomplete, or complete but the bungalow is still in situ, with no amendment of title and deeds to reflect the changes, will severly affect the interested audience for onward sale.

There may be a solution for this, but it won't be staightforward and the normal self build lenders won't lend on the current format you're presenting. I doubt very much that you'll secure finance on standard resi rates, and I do think ulitmately you may be looking at bridge or investment finance.

However, before you go down that road you could give buildstore a call to discuss, as they do tend to think os the box with regards sblds and refurbs. http://www.buildstore.co.uk/.

Hope this helps

Holly