After eventually selling our house to move into the world of self builds, im now looking around for finance/mortgages etc. 

 

Before the sale of our house fell through in July/August, i had a mortgage advisor on the case who was coming up with some decent options.

 

As im now looking freshly, ive clicked on a few links etc etc and came a cross an agent, who i discussed a few things with, these few things never came up when i was speaking with the other mortgage advisor in July. Can anyone shed any light on this for me please ?

OK, land cost £250K, build cost £200K (premium on land because of location). 

 

Paid £20K deposit on land and have £180K equity from our sale. OK were at £200k, still owe the land owner £50k (family friends, so not knocking on the door . . . yet!!).

 

Just been told that some lenders who pay in arrears only pay about 60% of the cost of each portion of the build, so if first section was £40K they might cough up £30K for example, on each part of the build, right up to the end when you MIGHT get the full balance, if when they value it and it comes up as being OK, as in they value it at more than what its cost to build. 

 

The other thing im thinking about is i still need to pay the people we bought the land off their outstanding £50K, when is that included in the mortgage as they could do with it before we start building really, not at the end when its a house and we get a mortgage (or not as some people have found out). 

 

any help appreciated.

 

cheers

Edited November 26, 20196 yr by Tonymac01

A bit more info would help 

Where you are 

size of build 

Do you owe the land owner 5 or 50

It can be tricky borrowing against the land as what it’s worth to you may be less than its actual worth 

12 hours ago, nod said:

A bit more info would help 

Where you are 

size of build 

Do you owe the land owner 5 or 50

It can be tricky borrowing against the land as what it’s worth to you may be less than its actual worth 

Hi, yes typo, its £50k outstanding. 

 

Halifax, west Yorks.

 

Value finished will be £550K

 

Cost of land £250K

 

Build £200K

Does the build include VAT on materials and % contingency.

 

Not a fan of buildstore, but don't they offer an advance payment mortgage?

On 26/11/2019 at 21:28, Thedreamer said:

Does the build include VAT on materials and % contingency.

 

Not a fan of buildstore, but don't they offer an advance payment mortgage?

It would be £200K + VAT 

Yes we have a contingency .

 

our land was £125K with planning approved, we bought it cash and then ecology lent us £100k as first mortgage release against land value which got us going (but you do have to have approved planning)

so they should, in theory lend £200 against your land, you can pay the 50 back to family and friends and the remainder should get you to watertight and then get a bit more released to finish.