Current house mortgage vs self build

[Bramco]

Hi,

 

We've just been granted planning permission - the 'granted' bit makes it all sound a bit medieval - which it is - took us 3 years and an appeal.....

 

That aside, we now need to make sure the finance is in place. We can cover all but about £100k and have been looking at how to find this part.  We own our current house outright and it's worth about £450k, so naturally we would look to a mortgage on this rather than a self build mortgage as the rates are much better.

 

So the question is how do you convince a bank or building society to loan you that kind of money on a new mortgage on the current house?  Speaking to brokers some time ago, as soon as we mentioned financing a self build, there was much sucking of teeth and quotes for bridging loans at extortionate rates.  I noticed someone on a post a couple of years ago saying they had said they wanted to buy a 2nd home. We have rental properties, so I guess we could say it was for a deposit on a new rental property.

 

Is there any experience of raising money on your own home and if so how did you do it? And which bank/building society did you use?

 

Thanks in advance for any help.

 

Simon

[Bozza]

Hi Simon, so we were mortgage free when a house came on market that was ripe for a replacement new build.

 

via Buildstore their broker was able to access an interest only mortgage from Santander on my existing house that provided money to buy the second property.   We then got an Ecology self build mortgage To build the new house.

 

we put our old house on market at Xmas and received an offer quickly, completing just before lockdown, so we’ve been renting until the new build is completed next month. But it meant we paid off the Santander mortgage earlier and we only have had to drawdown about a third of the self build mortgage.    Those savings obviously offset by the rental costs.

 

One of our worries had been what happens if the new house was ready and the old house didn't sell.  Not a worry now.
 

as you have your plot & PP why not sell your current house.   Move into a rental - doesn’t have to be posh, then self build with cash in the bank.  Thus avoiding lots of mortgage fees and risks of not selling 
 

 

Edited October 16, 2020 by Bozza

[Bramco]

55 minutes ago, Bozza said:

why not sell your current house.   Move into a rental

 

Hi Bozza,

 

That's not going to work..........    I probably don't need to say any more.......

 

Thanks for the info though.

 

Simon

[Bozza]

Though there are fees via Buildstore they seem to have access to products that we can’t get.