A Habitable headache

[Edme]

Hi everyone 

 

After being a long time reader, finally a ‘suitable plot’ has come. It’s a steel portal barn which has been used as a boarding kennels with full planning for conversion to residential. The walls are double leaf full fill insulation. It has a fully functioning toilet, It has ASHP for heating with electric and water onsite…… plus 8 neat holes in the external wall for the pups to explore the field. 
 

the kicker is we can only afford to buy on ‘residential’ mortgage leaving us with fund to renovate. If we get a selfbuild the added deposit and added interest would wipe out our funds. 
 

Does anyone have any experience on what would be required for a lenders to give a standard residential mortgage? 
 

 

[Moonshine]

Are you sure that self build mortgage wouldn't work, you only pay interest on the amount you draw down, not the total amount borrowed.

 

Have you spoken to a self build mortgage broker?

[Edme]

I will admit, I don’t fully understand the self build mortgages. My interpretation was generally need 20% deposit of purchase price, pay a higher interest rate e.g. 6% they release the fund in stages or all together depend on lender. Once the build is complete you can pay a ERC and go a find a lower interest mortgage?
 

In discussion with mortgage broker, we discussed and discounted a bridging or renovation loan, they told us it would be too expensive. We have sent them photo of the site, they are going to have another meeting to see what our next move would be 

[Moonshine]

6 minutes ago, Edme said:

I will admit, I don’t fully understand the self build mortgages. My interpretation was generally need 20% deposit of purchase price, pay a higher interest rate e.g. 6% they release the fund in stages or all together depend on lender. Once the build is complete you can pay a ERC and go a find a lower interest mortgage?
 

In discussion with mortgage broker, we discussed and discounted a bridging or renovation loan, they told us it would be too expensive. We have sent them photo of the site, they are going to have another meeting to see what our next move would be 

 

That is pretty much the size of it, but say you have a self build mortgage of £150k, and for your first stage you draw down £50k, you are only paying the 6% on the £50k, not the full £150k. However you do have to be careful in minimising the time you are exposed to the full draw down of £150k.

 

Hopefully your broker comes back with something positive.

[AlSmith]

I used Buildstore for an uninhabitable property, they sourced through Furness Building Society. Interest only and after 2 1/2 yrs I converted it to repayment with them at far better rate. They were pretty cool with definitions of complete!   Only borrow what you need in stages and minimal re inspection costs between draw downs. Insurance was quite pricey but worth the peace of mind.