draw down difficulties,

[Kings]

We seem to be having unforeseen difficulties with draw down of funds with our building society. It may be that we have misunderstood. The product was a 75% mortgage so 75% of land and build costs max 75% val of total project at anyone time. We have borrowed 2k from morg company at outset as they said we need to to kick of morg. I have then spent 220k of my own funds on the project. Valuer has been out and valued project a 200k currently. The roof is on and windows yet to go in. 

So we have had no release of funds for land, foundations, roof etc so we have funded 3 stages ourselves.

 

I understand funds are released after completion of each stage(although this morg is advertised as having flexible stages) Now I have asked BS for 140k based on the 3 stages completed and their land to value criteria. They are offering 60k. I have asked why I can not have the 140k and they said it does not work like that and is at underwriters discretion.

We have never had any detailed drawdown plans from the BS and they seem to be hiding behind, 'its at their discretion' but I find it impossible to plan a cash flow and understand their requirements as they are not being transparent with them. I was just working on what was advertised in their literature 75%LTV

 

I have not been at all worried about funds advanced in arrears of stages as I have funded the first 3 myself so was confident they would released funds on these stages that have been completed. They seem to be indicating that part of the morg application consideration was that I could fund the first 3 stages then they would fund the later, then advance in arrears the stages that they are funding? This was not made clear to me. They said I had to spend my own funds first but , not that they would lend on what I had funded. I am not sure this is the entire problem but they have muttered this. I only get to speak to the admin assistant not the UW so they have limited knowledge.

 

I have asked for a lump sum that is more than I need currently but I was happy to pay the interest on it and thought it would be simpler that many draw downs and valuations etc.

I had also emailed the building society my cash flow previously for confirmation that they we happy with it and they just said Underwriters will confirm as build progresses.

 

Any advice or similar experiences? 

 

 

[recoveringbuilder]

Don’t know anything about self build mortgages as it’s a long time since I have had one but the one thing that is striking me is that you have not installed the windows so the building is not wind and watertight which I would expect is one of the stages. I also am wondering if the fact you’ve currently spent more than the building is being valued at has something to do with it, as I say I know nothing about mortgages but it’s just what I am picking up on, I’m sure someone who knows about these things will be along shortly.

[nod]

Plus one with Christine 

Normally you would get the foundations in Then the mortgage company would charge for an inspection to release funds 

Then same with the roof 

Are they perhaps miffed that you haven’t had these two valuations from them 

and there fees

[Temp]

Presumably you have some paperwork that was signed at the outset. What does that say if anything? Just the total amount they will lend?

 

[Kings]

Hi temp 

I have looked all over paperwork and it just gives the 75% ltv in arrears as quidance?

[Kings]

1 hour ago, Christine Walker said:

Don’t know anything about self build mortgages as it’s a long time since I have had one but the one thing that is striking me is that you have not installed the windows so the building is not wind and watertight which I would expect is one of the stages. I also am wondering if the fact you’ve currently spent more than the building is being valued at has something to do with it, as I say I know nothing about mortgages but it’s just what I am picking up on, I’m sure someone who knows about these things will be along shortly.

Thanks, you are right that it is not water tight but we have completed, Land purchase, foundations, build to roof, so I would expect to have the funds released from these stages? And the funds from water tight released later. We should be able to release 140k based on what we have done I would have thought. They also advertise they don’t have set stages. 
I think it would be normal to spend more that the project is worth as it progresses, I might be wrong? But land with a half built house is not worth the money spent on the project and land  because if it did not complete the land would possibly be devalued as half built house on it. 

[Kings]

11 minutes ago, Temp said:

Presumably you have some paperwork that was signed at the outset. What does that say if anything? Just the total amount they will lend?

 

Thanks. See below too. Total agreed lend is higher than the 140k we are requesting?

[Kings]

32 minutes ago, nod said:

Plus one with Christine 

Normally you would get the foundations in Then the mortgage company would charge for an inspection to release funds 

Then same with the roof 

Are they perhaps miffed that you haven’t had these two valuations from them 

and there fees

that is possible, I would really like to understand how they view this and what the requirements are but it is not clear and still waiting a reply? In the mean time I am left wondering so thought I would ask hear in case anyone had similar experiences 

[Thedreamer]

Usually wind and watertight is the next big stage after foundations. 

 

We aimed for that when we were building and taking the first drawdown.

 

We had our roof slated but I believe some even consider a roof membrane as being sufficient. But having the windows and a doors is definitely needed for that stage. Why not use the funds to get those installed and then request the second valuation.

 

It might even be worth contacting the valuer to ask how that would impact their valuation, a quick five minute call might help. 

Edited July 19, 2020 by Thedreamer