New build finance
Discussion
HI
Any of you finance gurus have any ideas of the best way forward to fund a new build property !
So i managed to get planning consent for a new build on some land (separate tile) on the rear of my existing garden and I'm looking at the best way of borrowing to do so.
My current house has an approximate value of 850k and we have a 150k interest only mortgage no other loans, i have 135k cash on which to start.
Mortgage has a 7k redemption and ends in january
The land has been valued at 300k and i have a build cost of 480k although i could move in un finished.
agents have estimated the value of the new house to be 1 million plus
Im a partner in a small development company that has a retained profit after tax from our last project of 375k i can't access this as we are lining up our next project.
income between me and my wife is 60k, both self employed which seems to be the issue, i have masses of equity and the project stacks up by 400k however my wages are rubbish. (family businesses for you
) Ive had a self build mortgage approved in principle however it is at 4.99% and i don't fancy the finished repayments of 1700 per month whilst i sell my current property.
Cheers in advance
SS
silversurfer1 said:
Ive had a self build mortgage approved in principle however it is at 4.99% and i don't fancy the finished repayments of 1700 per month whilst i sell my current property.
Given your income, I would say this is your main option.........£60k isn't enough to lend the money you need on a standard mortgage...Get started on releasing equity on current property, start new property with the £135k, should be able to get the walls up, roof on with that? Takes you to around your redemption at the end of the year/early next. Move into rented until new build finished. Having done this a couple of times in the past, don’t move in unfinished!
jrinns said:
Silversurfer needs to write a book !
£30 k a year and is living the dream regarding assets and equity...
:-)
Thats funny ! £30 k a year and is living the dream regarding assets and equity...
:-)
No real secret I'm 50 been working for my family plumbing business since i was 16, never left as i didn't want to let the family down so i got into property bought my first (a barn to convert) in 97 took me 5 years graft to convert it caught the market right sold it and walked away with 250k, ploughed it all into another plot and borrowed myself up to the eyeballs sold it and walked away with 650k bought a house (that had a poss plot) renovated it and still in it.
In the mean time i did some developing to a good builder friend of mine
managed to get consent on the plot but lending has tightened up and here i am.
Will probably do exactly that get the ground work done site tidied up sell, rent and finish off.
Not going to get much for my book am i
Thanks all
SS
Agreed !
Amazingly difficult to get money now, 10 - 15 years ago i knew our bank manager well, he would visit site make an assessment there and then and i could have the money the next day.
Seems those days are now sadly gone i wouldn't even know who the manager is anymore.
I went to the HSBC sat and got interviewed by 4 12 year olds to then be told we don't lend on land
SS
There are lenders that can hair cut your retained profits if you can show a good track record. That way you can borrow against the main house.
Sometimes cheaper to pay the ERC then crazy development interest rates and arrangement fees / surveyor fees, dual legals a lot of of them ask for.
If you know what you are doing and have a good development team, no need to have the extra hassle.
Sometimes cheaper to pay the ERC then crazy development interest rates and arrangement fees / surveyor fees, dual legals a lot of of them ask for.
If you know what you are doing and have a good development team, no need to have the extra hassle.
Edited by jayxx83 on Friday 12th June 22:55
silversurfer1 said:
Agreed !
Amazingly difficult to get money now, 10 - 15 years ago i knew our bank manager well, he would visit site make an assessment there and then and i could have the money the next day.
Seems those days are now sadly gone i wouldn't even know who the manager is anymore.
I went to the HSBC sat and got interviewed by 4 12 year olds to then be told we don't lend on land
SS
That all rings a bell!Amazingly difficult to get money now, 10 - 15 years ago i knew our bank manager well, he would visit site make an assessment there and then and i could have the money the next day.
Seems those days are now sadly gone i wouldn't even know who the manager is anymore.
I went to the HSBC sat and got interviewed by 4 12 year olds to then be told we don't lend on land
SS
After mine retired it went from agreeing finance over lunch to 'The Bank has no appetite for speculative development'
Have you considered renting your existing house out and retaining it?
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