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Self build mortgage
Laura_wilson
Posts: 2 Newbie
Hi, hoping someone will be able to assist?! We are looking into buying a derelict residential building - arson attack has left it inhabitable. Planning permission has been approved for the house to be knocked down and new residential home built in its place. Would we be able to get a mortgage for this? If so how much deposit and what type of mortgage? Thanks in advance, Laura x
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Comments
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Broker.
Yes, self-build mortgages are available, but they're very specialist at the best of times.
What do you see the plot cost, build cost, and GDV as being? How much equity do you have?0 -
Google Self-build mortgages.
The Ecology Building Society say they specialist in this sort of mortgage and will lend upto 80% of the value of the final property. All self-build mortgages will release the money in stages, so you will usually have to enough money to buy the plot, and get the services and the foundations in they will release any money at all to you. Once you have the next tranche of cash you can erects the walls and get the roof on, at which point they will release another tranche of money, and so on. You get the last tranche of money when the house is at a stage that anyone would buying, i.e. it is substantially complete, but at least all the contractors get paid.
Don't forget to factor VAT and the delay in reclaiming VAT into your financial calculations.
Self-build mortgages are a good way to make the project happen and save money over a conventional mortgage in that you are only borrowing the cost of building the property, and not borrowing to pay the builder's profit or seller's perception of what their property is worth.The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.0 -
Hi, thank you! The plot is £150,000 and we have about £50,000 . The planning permission is for a 5 bedroom house, which is much bigger then what we need, we would be happy building a cabin, bungalow or a 3 bedroom house,and living in a static caravan until at a liveable standard. Already water and electricity which need reconnecting but septic tank would need to be put in x0
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