BuildLoan, Chorley and mortgage fund releases

[oldcoop]

Wondering if anyone has any words of experience/wisdom on release of mortgage funds and whether lenders are ever flexible...

 

We agreed our mortgage with Chorley Building Society via BuildLoan last summer. Unfortunately because of a few delays our builder fell through and we'd had to find a new one. With exchange rate fluctuations etc, material costs have gone up, and the project is now looking like it'll eat up our £25k contingency before we start... not an encouraging position.

 

I'd like to be a bit flexible and delay some of the

non-essentials if needed (e.g. Some of the plastering and internal stuff). But our mortgage funds are released in chunks on completion of certain stages, withholding 10% until the end of the project, and it looks like they require plastering to be done and essentially for everything except floor coverings to be completed.

 

Does anyone have experience of a similar problem?

 

I'm wondering how they inspect, how rigorously they apply their payment stage criteria and whether there is likely to be room for manoeuvre.

 

Didn't want to steam in and ask them for fear of scaring the horses!

[ragg987]

My experience of the mortgage company inspections, we had 3 of them:

1. Groundworks and basement complete stage payment. Inspector stood on the road and took some photos, did not want to get muddy shoes. Total time on road 5 mins.
2. Timber frame and windows complete stage payment, inspector stood outside the building and took some photos. Total time on site 5 mins. We still had not installed some doors at this point.
3. Build complete (actually we had not, but this inspection was tied to BC who were happy to sign-off once we had some basics completed - working bathroom, kitchen, electrics, smoke alarms, drains were the main aspects, though we did need to supply a bunch of documentary evidence). Inspector wandered around house for 5 mins, took some photos... (you get the picture!)

Our BS contracted the inspection to a third party. As this was the only independant basis, I would say the process was not at all rigorous.

 

On the question of steaming in, my BS was getting very picky in the early days leading to delays and I complained - amongst the points I made was that their delay was adding increasing to them as I would have been forced to abandon the build mid-way without timely funding. This helped unblock it very quickly.

[MikeSharp01]

This sounds obvious but, assuming you are up for it, have you been back to them for a bigger mortgage, the new contingency,  if your loan to value is OK it perhaps won't breach their risk appetite and you won't need the money unless you need to go into the new contingency. Should be fine if you don't need it as you won't draw it down although that would depend on any early repaymet terms in the mortgage. 

[oldcoop]

Thanks @ragg987 - really helpful. Suspected this might be the case but handy to hear it!

[oldcoop]

32 minutes ago, MikeSharp01 said:

This sounds obvious but, assuming you are up for it, have you been back to them for a bigger mortgage, the new contingency,  if your loan to value is OK it perhaps won't breach their risk appetite and you won't need the money unless you need to go into the new contingency. Should be fine if you don't need it as you won't draw it down although that would depend on any early repaymet terms in the mortgage. 

 

Yes, I wondered that. But unless they have changed something thenwe're up to the ltv limit - they gave us £5k less than we originally asked for so I think we're low on options there sadly.

Can borrow from famil, who have been helpful, but would like to avoid that if poss! 

Just annoying if lender does want it all finished as we're relaxed on finishing over a longer period (after all, we've lived in a building site for the past 5 years!)

[Archie]

When we set our mortgage up we had 3 stage payments:

 

1) First one on having Planning Permission on the land (we owned this outright with no borrowings)

2) Wind and weather tight

3) On completion.

 

I was shocked to see this on completion final payment and after speaking to the building society we reduced the final stage payment to the minimum of £10k.  We have not got to this stage yet but if things are really desperate its not too hard to borrow £10k over the short term.

 

We went with the Loughborough BS who are really good based on our experience.  Ditched Buildzone early on due to the extortionate fees they charge!!

[oldcoop]

4 minutes ago, Archie said:

When we set our mortgage up we had 3 stage payments:

 

1) First one on having Planning Permission on the land (we owned this outright with no borrowings)

2) Wind and weather tight

3) On completion.

 

I was shocked to see this on completion final payment and after speaking to the building society we reduced the final stage payment to the minimum of £10k.  We have not got to this stage yet but if things are really desperate its not too hard to borrow £10k over the short term.

 

We went with the Loughborough BS who are really good based on our experience.  Ditched Buildzone early on due to the extortionate fees they charge!!

Yes - BuildLoan/store are exhorbitant and totally useless! Licence to print money!! Would definitely avoid if we live to tell the tale and ever do this again. Hindsight is wonderful...