Self-build mortgage? Help

Grogle

My Fiancee and I are looking into the possibility of building a house. We have found some land £150000, with planning permission for a 4 bed detached house with garage.
I have done some basic research and reckon about £100 000 should cover the costs of building the house. Given this what is around for people in our situation?

We currently have a 150k mortgage on our house which we have and are planning on seling. We haven't had it valued recently but it was 160k 2 years ago, and must have gone up in that time (even taking the current down turn) and we have also renovated it.

Optimistically we will have about 15k equity pessimistically about even!

We have increased our income between us by about 15k/year since we got the last mortgage and have also paid off a small chunk of our debt ~5-10k

I'm wondering about the state of the mortgage market for self build mortgages? Are they now also harder to get than before like other mortgages- or have they escaped a bit on the basis that the end product is worth significantly more than the sum of its parts? (it most certainly would be in this case!!!)

Any help greatly received!

UK007BullDog

I dont do any self build mortgages. However the other day at WHS I saw some good magazines on building and also on self build mortgages and they had lots of ads in there for self builders covering everything. I suggest you read a few of them to get an idea of what you are taking on.

Plus try to get rid of as much debts as you can.

With the downturn on the big boys building houses you might be in for a shock to find you can haggle will with the local building trade to get your house done quite cheap(ish).

Grogle

Do most normal brokers avoid this type of mortgage then? If so then where do I get more info apart from magazines?

Tiddler_2

Self-build mortgages are not that much of a regular occurence but there are some options out there.

You will need about 5-15% of the cost of the land as a minimum.

A company called Buildloan offer advance stage payments, which can make it easier

Here's a leaflet they offer which explains a little more.

http://www.buildstore.co.uk/buildloan/downloads/informationforselfbuilders.pdf

selectcase

Call buildstore - they do a good range of products in this area and buy "the self build bible" excellent book for research as you will need to provide accurate costings - typically £800 per square metre or £1k for a barn conversion.

phlash

May I recommend you read this first, it is mighty good, and a good investment if you're serious about self-build. I bought it for myself, and it gets you thinking about all the things you need to, which is alot! Including legislation on visibility from your driveway!

http://astore.amazon.co.uk/irishlincouk/detail/0954867408

toonfish

We do a fair bit of self build stuff, through buildstore if the need is for funds upfront but there are better direct deals if you can finance the build yourself (or get contractors to wait for payment).

You do generally need a decent deposit and you will need to come up with some more I suspect

adr0ck

Tiddler wrote: »

Self-build mortgages are not that much of a regular occurence but there are some options out there.

i think theres something like 15000 self builds a year (based on VAT reclaims)

works out to be about 8-10% of new homes built a year

i would 2nd buying Mark Brinkleys book

adr0ck

note on buildstores website regarding its self build mortgages it says

This product is temporarily unavailable. Please call BuildStore on 0870 870 9991 for details.

selectcase

Can you provide a link as i cant see anywhere where it says the products are not available

Conrad

Your going to need a lot of equity. The lender needs a large cushion at each stage of the build in case you default and they have to sell into a poor selling market.

You mention £17000 above which will be inadequate. More like £50,000 + and dont forget you will have all sorts of up front costs such as Architencts and site insurance.