Best way to finance a house build?

triggsy

Hi, can you give me some advice please on how to finance a house build based on the following facts?

In-laws own a house with large side garden. They have permission for 2 bed end of terrace house.

Objective is to build the house, they move in, sell their existing house and have no mortgage.

They have a £30,000 interest only mortgage and earn very little (both are in their early 60's).

Myself and wife will be the 'fund raisers'. We currently have £60,000 left on our repayment mortgage. Our joint income is circa £55,000.

Their current house will be a mid terrace when finished and has a projected valuation of £180,000.

They also have to pay £25,500 up front to the local authority to have a restricted covenant lifted. Cost of building the new house varies from £67,000 to £80,000.

So i would need to borrow £25,500 + £80,000 = £105,500 max. This will all be paid off when the existing house is sold (if the market doesn't crash before then).

Can you recommend the most efficient way of borrowing this money please?

My building society (Leeds & Holbeck) will only lend me £76,000 which would probably be ok if i didn't have to pay the local authority £25,500!!!

Many thanks
Simon

Rafter

Simon,

Get hold of a self-build magazine and look for specialist lenders in there.

They should have come accross the situation you outline and as long as you have a good surveyor and plan should lend you enough based on the valuation of the two properties at the end of the build.

Good luck.

R.

triggsy

Thanks Mr R, i'll pick up a copy of Build It magazine.

Simon