Self Build Mortgage Scotland

engineer21

Hi all,

looking for some advice, we would like to build a house,mostly using builders (self build mortgage)
prob have enough to buy the land 40- 60k cash, but it would max us out (without using equity in current house)

what i really dont know about is the mortgage? anyone got any advice? or places to go for advice? local rbs were no help....

thanks

Lilla_D

Self-build mortgages is a specialist lending type and some of the lenders don't do it in Scotland, so you'd be best placed to speak to a broker. If you've already got a mortgage in place and you're looking to build your new home this way, your affordability calculation is not straightforward anyway.

Just to say, most (not all) lenders work in a way that they'd give you some money to help buy the land and then release the rest of the agreed loan facility once you've completed some pre-agreed stages and a satisfactory assessment has taken place. I.e. don't max yourself out with the purchase, because most lenders will require that you pay for the works before they release some cash, so you can carry on with the next stage.

engineer21

thanks for that, will try and speak to a mortgage broker, i used one when i first bought a house and it went well so will try that again, thanks

ms1971

Hi there, going through same process at the moment in Scotland. There are a few options ie lenders: Scottish Building Society, Halifax being a few. We ended up going with Buildloan through a mortgage advisor, although fees are quite high approx. £2.5k everything is under one roof and they also provide a realistic costing's service for the whole build @ £100 which speeds mortgage application process up....they recommended 'Newcastle Building Society'. We checked out Halifax originally, there fees were approx. £1k but the amount of info, paperwork they were requesting seemed like it would be a nightmare! I would advise a Mortgage Broker tbh, they get their fee from Buildloan so are free but its probably hidden in Buildloans charges anyway so you are as well using one. All the best with the build.

engineer21

thanks for info really appreciate it, what stage did u approach them? before land purchase?

ms1971

We sorted plot out first, seen it advertised and agreed on a price depending on the sale of our house, which sold in 2 weeks. I would get finance organised first, you will have to provide a lot of info/paperwork etc and be aware that planning & building warrant applications can drag on....ours took 8 months and apparently that was quick!!
We are going with an interest only mortgage during build which will keep costs down and you will be able to borrow against the value of land if you have already bought it, Newcastle do not charge early redemption fees so you can re-mortgage as soon as build is complete.
Cheers