Need to raise £40K!!

lady_lucan

Hoping someone can advise me on this maze...

I've seen a plot of land in NW Scotland that I want to buy to build my retirement home on. Cost of the land is offers over £40K, doesn't have a closing date posted as yet, so am assuming they haven't been inundated with offers.

I am 30 and at the start of this year took out a joint mortgage through Abbey for £83K on a house, requiring much renovation, then valued at £93K. We have completed the major repairs and installed a new kitchen. Bathroom is on its way, then the house needs decorative upgrading. All this should be completed by next spring. Ceiling price in the street for same size house seems to be around £130K. I recently took out an unsecured personal loan of £25K at 7.9%, 60 months left to run. The mortgage has 20 years left to run and we are tied to the Abbey until end 2006 on a 5.2 variable fix.

I have recently started a higher paying job, with the result that me and partner's combined income is £35K annually. We are pretty maxed out on bills and repayments; could probably find £130 pcm spare. Also, I was the victim of a car accident 3 months ago and have an injury claim pending - this could yield anything up to £20K, but more likely around 10.

I have my heart set on this land - it is the spot in the UK I would most like to retire to. I have researched into kit houses and feel I could begin the process of a self-build on the land in the next 3-5 years, as my pay will go up incrementally. (Can mortgage the property once build complete).Would like to be paid up on everything by the time I'm 50. I have a teacher's pension, OH has no pension arrangements (tends to work on short-term contracts). Also, I have an endowment taken out in 1999 but run as a skeleton account since 2001 when I switched to repayment, which I could cash in.

Would it be possible to raise this type of money? What would be the best way to combine cheapest rate with least short-term pain?

I realise this is a very tricky scenario - it's been doing my head in for about a month. I also realise the short answer is I can't afford it, but I really, really want to try - I doubt I'd find a better spot. If anyone knows, it's the MSErs!!

Cheers

L :A

lady_lucan

No-one? My OH is just laughing at me about all this..maybe split and go there meself

oceanblue_3

.....and maybe you're right! Have you phoned anybody yet to ask about borrowing the extra.......?

nadnad

Hi there you money situation is a bit complicated for me to get my head around but I am going through the process of buying a site and will be building next year - we got our finance through buildstore who seemed to be one of the few if not the only place that arrange for you to borrow 95% for land - very few places will lend money solely for land - as we intended to buy the site now and wait a few years to build (site was £40k - very cheap had to snap it up) any way buildstore help you to apply to a panel of mortgage people and they act as a sort of guarantor so that you can borrow 95% for land and build (most will only lend 85%) - you pay a fee for this but nevertheless. They also allow you to borrow in advance - most companies pay you in arrears - hence being no help when you need funding to actually buy the site.

Anyway you could check out Buildstores website https://www.buildstore.co.uk. I don't know if that will help in any way - oh and I forgot they specialise in allowing people to buy land and build whilst living in thier own house. The problem for you with this is that they require you to have the house built within two years of the mortgage being taken out - I don't know if there's any way round this.

On another point I will warn you now buying a site and building a house is a dream come true - but we are at the beginning and even now it is more work and money than we ever imagined. Even the application process to get the mortgage is complicated. Our site is £40k and we are building a 1700sq ft dormer bungalow (with 900sq ft upstairs that will eventually be used as proper rooms so in essence it will eventually be 2600sq ft - yippee!) anyway we have been quoted £840000 by a contractor to do the whole lot - which is reasonable (we aren't experienced enough to do a true "self-build") so that is £124000 - so far my budgeting takes that figure to £145000 - and I'm sure there will be other stuff I haven't thought of - our mortgage is for £114000 so we have to find the rest ourselves - very scary. And be warned the extra £30k is not frivolous - it is simply various fees and connection charges etc etc.

Any way I'm sure you've thought about this but if your money is pretty tight at the minute and with the 25K loan you've taken out its going to be a big undertaking - also if your OH isn't supportive it could cause problems. And I wouldn't rely on your compensation payout at all - use this as a bonus when you eventually get it. If I was in your position I would maybe wait until I was in a better position and look for another site but if you determined then please think very carefully.