Ecology Self Build Mortgage

[Internet Know How]

Hey Everyone,

 

I am looking into self build funding and see Ecology mentioned on this forum quite a lot. Few questions:

 

- When Ecology grant a mortgage, do you have a monthly payment up front, or do they class  this as a development type finance and roll it into the exit?

- I am assuming you only pay interest on the drawn down funds, rather than interest on for example a 500k mortgage up front?

- Would they take first charge over an existing property as part of the mortgage process or just provide the additional funds to build the new house as a 2nd charge

 

Thanks

 

Chris

[PeterW]

1 hour ago, Internet Know How said:

When Ecology grant a mortgage, do you have a monthly payment up front, or do they class  this as a development type finance and roll it into the exit?

Payments from the point you draw down the first amount - there is no roll up 

 

1 hour ago, Internet Know How said:

 

- I am assuming you only pay interest on the drawn down funds, rather than interest on for example a 500k mortgage up front?

Yes only on draw down

 

1 hour ago, Internet Know How said:

Would they take first charge over an existing property as part of the mortgage process or just provide the additional funds to build the new house as a 2nd charge

The charge will be on the plot / land to start with and then any building on it. 

 

[Bozza]

Chris, You are quite right Ecology are mentioned positively quite a lot here, in fact I’m not sure I’ve heard anything bad at all about them.   They are the sort of company that you can pick up the phone and have a chat with them knowing you’re speaking to a person with knowledge, as opposed to a general call handler in bigger organisations.  
 

I think they’re operating reduced office hours due to Covid but they’re the type of organisation that you can pick up the phone and have a chat about any questions that you can’t get an answer to here or on their website.

 

The main thing about them In my experience is they come across as approachable and flexible / relaxed.    When I did my shopping around for a lender that was the main reason I went with them. I think others had slightly lower interest rates but they for example will release the money when you need it as opposed at each stage and requiring revaluations/inspections as other lenders required.  As a self builder I found not having stress around the finances/lender a huge benefit.  

 

I can imagine Ecology BS being quite successful moving forward my only worry is one of the bigger banks buy them out and they end up like the others with crap customer service etc. 

 

And no, I don’t work for them and no this forum isn’t on some sort of commission with them  .  It turns out there are good companies / banks etc out there - ecology seems to be one of them.

 

 

 

 

[Ferdinand]

 I think the key to understanding Ecology BS is that they are small - they only write about £40m of mortgages a year.

 

And I suspect (don't know) that they are actually very well run.

[Internet Know How]

45 minutes ago, Bozza said:

Chris, You are quite right Ecology are mentioned positively quite a lot here, in fact I’m not sure I’ve heard anything bad at all about them.   They are the sort of company that you can pick up the phone and have a chat with them knowing you’re speaking to a person with knowledge, as opposed to a general call handler in bigger organisations.  
 

I think they’re operating reduced office hours due to Covid but they’re the type of organisation that you can pick up the phone and have a chat about any questions that you can’t get an answer to here or on their website.

 

The main thing about them In my experience is they come across as approachable and flexible / relaxed.    When I did my shopping around for a lender that was the main reason I went with them. I think others had slightly lower interest rates but they for example will release the money when you need it as opposed at each stage and requiring revaluations/inspections as other lenders required.  As a self builder I found not having stress around the finances/lender a huge benefit.  

 

I can imagine Ecology BS being quite successful moving forward my only worry is one of the bigger banks buy them out and they end up like the others with crap customer service etc. 

 

And no, I don’t work for them and no this forum isn’t on some sort of commission with them  .  It turns out there are good companies / banks etc out there - ecology seems to be one of them.

 

 

 

 

thanks for the feedback. They seem to have a maximum borrowing up to £650k which will be an issue for me as I already have a 300k mortgage on my plot and want to pay £500k extra for a build on top. I will certainly give them a call though to see if there is anything they can do for me

 

[Bozza]

2 hours ago, Internet Know How said:

thanks for the feedback. They seem to have a maximum borrowing up to £650k which will be an issue for me as I already have a 300k mortgage on my plot and want to pay £500k extra for a build on top. I will certainly give them a call though to see if there is anything they can do for me

 

A lot will depend on the valuation of the build of course. LTV and all that. £500k?  Jeez - Good luck with the mansion

[Internet Know How]

19 hours ago, Bozza said:

A lot will depend on the valuation of the build of course. LTV and all that. £500k?  Jeez - Good luck with the mansion

Its not going to be easy, but the hard work will be worth it. I want to build 5 bed detached with basement. Can go up to 520SQM on site over 3 floors, which is a 200SQM footprint. If I add on a basement then just over 700SQM. The problem I have is trying to work out exactly how much I will spend. I have done a full renovation before on a 380sqm and it cost me about £380k, but I did pay 60k for outside wall and gates in that plus another £50k on the kitchen. This also included all the carpets and wallpaperings etc. I now just need to add on how much extra I would potentially pay for all the 4 walls, roof and groundworks. 

 

To be honest I am probably getting on for £550k easy. As its a sand foundation I need to pile, but I can get rid of the sand for free so I might as well excavate and put in a raft instead, and gain another 200SQM. I can concentrate on the main house with the funds and later finish the basement if funds available.

 

Even if I never finish the basement and sell on the property, its an excellent hidden extra for the buyer to convert themselves. This will be a 1m plus property so im sure they will have the money to do so.