Triggers for a standard mortgage, with a 'self build' house

[Andehh]

We are going through our finances and have a problem 'timing gap' between builders likely last payment & mortgage coming through.

 

We are borrowing money through family to cover the last couple of months of build, before we take out a normal mortgage & repay them all.....all to avoid a self build, high interest, mortgage. However, there is a risk of builder needing final repayment before the mortgage clears which give sus the extra funds to pay this cost & repay everyone.

 

At what point of our 'self build' would we be able to start the mortgage rolling. Is it feasible to get a standard mortgage pulled together during the last month or two of build...giving us time to receive the money & pay builder within 2 weeks?

 

ie...Does a mortgage need the kitchen & a single working bathroom before we can start the ball rolling, or does the mortgage need any other triggers to allow us to start the process? 

 

Emailed our mortgage advisor, but she will take a few days to reply to me...just want to see if I can get any comfort beforehand.

 

Thanks very much

 

 

Edited February 6, 2022 by Andehh

[Dave Jones]

you will need a completion cert and warranty.

[CalvinHobbes]

Hoping not to have to borrow for our build (maybe the credit union will get a touch on the finish) but just in case what warranty?

[Bitpipe]

15 minutes ago, Dave Jones said:

you will need a completion cert and warranty.

 

You may be asked 'if you have them' but may not be asked to produce them (my experience). We moved from an Ecology Self Build mge to a high st one while the house was still not signed off due to some external landscaping details. That said, it looked completely finished.

 

Ultimately, your new lender will need the house surveyed to confirm the valuation you are borrowing against so it will all hinge on your LTV and what the surveyor thinks.

[Dave Jones]

14 minutes ago, CalvinHobbes said:

Hoping not to have to borrow for our build (maybe the credit union will get a touch on the finish) but just in case what warranty?

 

Have a look at your lenders approved warranty provider list. bit late if you haven't got one in place as they need to inspect from the start.

[Andehh]

Thanks very much all!

 

Yes, have a build zone warranty from day 1...any experience with them in this scenario? 

 

LTV is very good, only borrowing about 30% of value. 

[CalvinHobbes]

file:///C:/Users/pc/Downloads/new-build-guide.pdf

Who are this Alpha crowd?

[Dave Jones]

good to see they accept CRL warranty.

 

They are the ones that went bust leaving their policies worthless.

[Dan1983]

I was also wondering at what point a regular mortgage can be used.

Our kitchen is in but no bathrooms or heating.

House being valued tomorrow by an estate agent to get an idea of what we need to borrow but not sure if it’s a tad too soon 

[markharro]

We are at groundworks stage of our self-build with an Ecology mortgage granted. I had dismissed the idea of a structural warranty as Ecology do not require this. However I think I may be missing something. Once we get to completion we will almost certainly want to re-mortgage to a standard mortgage. Will the lack of a structural warranty mean that no conventional lender would look at us at that stage?

 

Are Build-zone the best for these warranties?  thanks

[Bozza]

On 17/08/2022 at 09:59, markharro said:

We are at groundworks stage of our self-build with an Ecology mortgage granted. I had dismissed the idea of a structural warranty as Ecology do not require this. However I think I may be missing something. Once we get to completion we will almost certainly want to re-mortgage to a standard mortgage. Will the lack of a structural warranty mean that no conventional lender would look at us at that stage?

 

Are Build-zone the best for these warranties?  thanks

I also used Ecology and decided against a structural warranty.  I then swapped to a standard mortgage after completion (lucky enough to get a 2.04% fixed rate for 5 years earlier this year).  My residential mortgage is with Santander.  
My build was inspected by an architect whom issued architects certificates PCCs which are accepted by the main lenders.  
Everything worked out perfectly for us, the Santander surveyor took 10 mins to inspect as we had all paperwork ready to go.  
This is perhaps your solution, assuming you have an architect supervising your build. 

 

[Conor]

We've just got a mortgage with Bank of Ireland, just needs architects sign off cert. A painful 3.69% tho 😭

[Barryscotland]

5 hours ago, Conor said:

We've just got a mortgage with Bank of Ireland, just needs architects sign off cert. A painful 3.69% tho 😭

Still better than a self build rate an as long as it’s fixed then I think you will be laughing and breathing a big sigh of relief next year unlike us still on self build variable rates

[markharro]

Just got a quote from Protek for a warranty - around £3300. How much would you typically pay a supervising architect for a certificate in comparison?

[Thedreamer]

On 19/08/2022 at 16:13, markharro said:

Just got a quote from Protek for a warranty - around £3300. How much would you typically pay a supervising architect for a certificate in comparison?

 

Or a RICS Surveyor? I paid £960 in total for inspection certificates during 2018-2020.

[puntloos]

Tagging on to this topic - my house is starting to be recognisable as a house, but it's nowhere near complete. Basically: all holes are plugged (windows, doors). Most insulation is on. No Mechanical or Electrical to speak of. 

 

But, as @Bitpipe said

On 06/02/2022 at 17:32, Bitpipe said:

Ultimately, your new lender will need the house surveyed to confirm the valuation you are borrowing against so it will all hinge on your LTV and what the surveyor thinks.

 

Even if I value my "current" property at only about 1/3 of a conservative final value, my LTV would only be 50% for the amount I'd like to borrow.

 

Do I stand a chance with half-a-house? Ecology mortgage currently stands at 5.79 but variable rate is no fun if you listen to the news.

Edited July 11, 2023 by puntloos

[Bitpipe]

I think it needs to be habitable and have an EPC before you would get a standard high st mge on it but all dependent on the surveyor. Have to say the last few surveys we've had for re-mortgaging were very simplistic and seemed to mostly consist of measuring dimensions of rooms.

[Dave Jones]

On 12/07/2023 at 00:30, puntloos said:

Tagging on to this topic - my house is starting to be recognisable as a house, but it's nowhere near complete. Basically: all holes are plugged (windows, doors). Most insulation is on. No Mechanical or Electrical to speak of. 

 

But, as @Bitpipe said

 

Even if I value my "current" property at only about 1/3 of a conservative final value, my LTV would only be 50% for the amount I'd like to borrow.

 

Do I stand a chance with half-a-house? Ecology mortgage currently stands at 5.79 but variable rate is no fun if you listen to the news.

 

the issue is you only have a 'house' once you have a completion cert, until then you have a building site.

 

 

[CalvinHobbes]

On 06/02/2022 at 10:04, Andehh said:

We are going through our finances and have a problem 'timing gap' between builders likely last payment & mortgage coming through.

 

We are borrowing money through family to cover the last couple of months of build, before we take out a normal mortgage & repay them all.....all to avoid a self build, high interest, mortgage. However, there is a risk of builder needing final repayment before the mortgage clears which give sus the extra funds to pay this cost & repay everyone.

 

At what point of our 'self build' would we be able to start the mortgage rolling. Is it feasible to get a standard mortgage pulled together during the last month or two of build...giving us time to receive the money & pay builder within 2 weeks?

 

ie...Does a mortgage need the kitchen & a single working bathroom before we can start the ball rolling, or does the mortgage need any other triggers to allow us to start the process? 

 

Emailed our mortgage advisor, but she will take a few days to reply to me...just want to see if I can get any comfort beforehand.

 

Thanks very much

 

 

So what did you do?