Advice for self-build Mortgage - Help

[ROB_GTR]

I am after a Mortgage for a self build and struggling to find anywhere that lends for self-builds....

I know you can get them but who and where can i get one from?

I currently own the land for the build (owe nothing) i have planning in place and pretty much ready to start the build as soon as i have some funds....

Help please

[Meeja]

Homebuilding and Build It magazines have regular lists of lenders to the self build market. (Pop into WH Smith)

Not sure if those lists are online

I can dig out a copy of the mag and post the info up later if needed.

[ROB_GTR]

Meeja said:

Homebuilding and Build It magazines have regular lists of lenders to the self build market. (Pop into WH Smith)

Not sure if those lists are online

I can dig out a copy of the mag and post the info up later if needed.

Thanks for the reply! Any info would be great, cheers!

[ClaphamGT3]

ROB_GTR said:

Meeja said:

Homebuilding and Build It magazines have regular lists of lenders to the self build market. (Pop into WH Smith)

Not sure if those lists are online

I can dig out a copy of the mag and post the info up later if needed.

Thanks for the reply! Any info would be great, cheers!

Try sending a PM to a Stumpy67 - I'm pretty sure he did a self-build recently

[matthuckstep]

I'm currently coming to the end of a self build and used the leeds building society for a self build mortgage. It was arranged through a broker but don't see why you could not apply directly

[Jer_1974]

I'm doing a self build just now. I went to www.buildstore.co.uk. They took a £400 commission from me to refer me to the BOS (one of the only places that offer self build mortgages in Scotland). They offered me 75% of the cost of the land and 100% of the build but I had to pay the bank fees (about 12K) and a 40K contingency up front. I pay interest only on the build but I think it's at base plus 4%. The RBOS also offer self build mortgages but when I looked it was 75% of total cost.
If your based down south you may have more options.

[tom_loughlin]

Another vote for Leeds BS, They lent to me as a first time buyer doing a chapel conversion when noone else would go near me - just as this recession nonsence was getting started.

Tom

ETA, I got it through Buildstore.

Edited by tom_loughlin on Tuesday 25th January 22:01

[shindha]

I think Birmingham Midshires do they are on line only now.

[Meeja]

Right... Doing this from a phone so formatting will be crap.

Advance payment lenders

The following will lend up to 80% of finished house value, in six stage payments - first stage payment is at land with permission stage.

All offer tracker deals.

Bath building society
Hanley economic building society
Saffron Building society
Melton Mowbray (75%)



The following offer arrear stage payment mortgages

Details are:

Lender - max %age of final value - number of stage payments - required stage for first payment
- contact

BM Solutions - 75% - Flexible - Flexible - 0845 233888

Chorley BS - 80% - Six - Land - 0845 233 4888

Dudley BS - 75% - Six - Damp Course - 01384 231 414

Furness BS - 80% - Eight - Excavation - 0800 781 4311

Norwich and Peterborough BS - 75% - Six - Land - 0845 300 2522


There are more available, more details from "Build It!" Magazine www.self-build.co.uk

[ROB_GTR]

Thanks for all the advice, muchly appreciated!

Im in Yorkshire if that has any influence on lenders etc...

I know Halifax do self-build loans but i hear they only do a "bridging loan" which puts me off a little

As said i already own the land and owe nothing on it but i have been told that Banks etc will not lend on the value of the land anymore... not sure if this is true or not.

The final value of the house will be 3 times the current value of the land and i only need to borrow the current value of the land (if that makes sense)

Thanks again for the advice so far!

[worsy]

ROB_GTR said:

Thanks for all the advice, muchly appreciated!

Im in Yorkshire if that has any influence on lenders etc...

I know Halifax do self-build loans but i hear they only do a "bridging loan" which puts me off a little

As said i already own the land and owe nothing on it but i have been told that Banks etc will not lend on the value of the land anymore... not sure if this is true or not.

The final value of the house will be 3 times the current value of the land and i only need to borrow the current value of the land (if that makes sense)

Thanks again for the advice so far!

Have been looking at this recently. Buildstore was my only choice as lending on land was difficult to get outside of Buildstore's exclusive range. I have a contact there if you need one.

[satans worm]

We did yours though Skipton BS, they give upfront payments for each stage and were no hassel to use, we also increased the amount we needed for the last stage with no problem.
I would say the only downside was the fees, quite expensive compared to a standard mortgage, but i guess in fairness, they take on more of a risk by giving you unsecured cash everytime they pay you in advance
Good luck and be generous with your amounts when estimating the stage payments, one tip we got is over estimate the early stages just in case you run short mid way through one, as you can extend (as we did) but I believe it is more difficult if you do this half way through a stage rather than for the next stage, if you know what i mean!

[Lefty]

Thought about securing money against the land?

I bought a croft, 6 acres of land and a steading. Secured money against the croft and the land (which needed change-of-use to agricultural) to pay for the conversion. All the cash upfront and better rates. That was with GE Money in 2006 who were quite happy securing money against agri land and "outbuildings".

[LeighW]

ROB_GTR said:

I know Halifax do self-build loans but i hear they only do a "bridging loan" which puts me off a little

I'm just finishing my self build, and mine is with Halifax, it's just a regular self build mortgage, interest only in my case, as it will be settled once my old house is sold. You have to own the land outright, and you must've owned it for 6 months or more if you bought it, no idea why though. Mine was done through a broker, can pass details on to you if required. They charged me a flat fee of £500, this was last summer.

[ROB_GTR]

LeighW said:

ROB_GTR said:

I know Halifax do self-build loans but i hear they only do a "bridging loan" which puts me off a little

I'm just finishing my self build, and mine is with Halifax, it's just a regular self build mortgage, interest only in my case, as it will be settled once my old house is sold. You have to own the land outright, and you must've owned it for 6 months or more if you bought it, no idea why though. Mine was done through a broker, can pass details on to you if required. They charged me a flat fee of £500, this was last summer.

If you would please... i have owned the land over a year now and demolished the house that was there to start with.

Some good info being added to!

Cheers all

[RWA441]

ROB_GTR said:

I am after a Mortgage for a self build and struggling to find anywhere that lends for self-builds....

I know you can get them but who and where can i get one from?

I currently own the land for the build (owe nothing) i have planning in place and pretty much ready to start the build as soon as i have some funds....

Help please

We recently went through this and we used buildstore who were very good.
Ours was the same as you, we bought the land and had some funds to begin. They then set up an 'accelerator' mortgage for us which meant you got you funds before each stage as oppose to an 'arrears' mortgage which you get the money after the stage is complete.
The only thing I would say is if you don't have a slush fund then over-guestimate your stage costs as once you use up what you allocated for that stage they won't give you any more until you send in the stage complete certificate (in our case from our architect)
We've been in for just over 12months now and it was worth all the time, effort, tears, blood etc...........
Good luck.

[ROB_GTR]

Thanks again for all the advice....

I have been in touch with Buildstore who have been pretty good so far.

Looks like we have 2 options really

1, Get a proper self-build mortgage over 2 years who will fully fund the build from start to finish with a big 1st payment so is ideal. But there is a catch.... you have to stay with them for 2 years and either pay interest only or repayment but the interest rate is 5.75 variable rate. To come out early (once built) it would cost in the region of 4 to 5k

or

2, Put a lump sum down (25k for arguments sake) to a lender who will give you 60% (i think) of the build cost, then give you instalments after that (once the build is worth more) but the good part of this is, you can pay interest only (6%)for the build then once built you can come away from them and start a fresh mortgage with loads of equity and get a good mortgage deal and begin paying it off.

So not really sure which would be the best route to follow.... i don't really want to put down a large lump sum but nor do i want to be stuck paying high interest rates for 2 years either.... HELP

[LeighW]

Rob, I borrowed £60k interest only from Halifax, 3.39% based on borrowing £60k with final value at least £200k, 2 year tracker. 3% early repayment charge year 1, 2% year 2. Certainly the best deal I could find at the time, taking all charges and fees into account. Have you enquired with them? Obviously my application was early last year so things may have changed. It is an arrears type mortgage, so you need enough cash to get the build to stage 1 (footings in and slab poured) before they release any funds. Good luck anyway!