Advance Self Build Mortgage

[nubbins]

Hi All,

 

I have a plot which I own with PP for a house, I have spoken to Buildstore and a few others about getting an Advance type self build mortgage and they seemed to think it was very doable and the amount they could lend exceeds the cost of the build. 

 

My question is how do the payment amounts work? So I own the land outright, if mortgage is agreed do I say I need £30,000 for the foundations then say I need a further £50,000 for the superstructure etc etc. What paperwork do they want to see and do they need to estimates upfront.

 

Thanks

 

 

[willbish]

I'm in a similar position to you, self build mortgage on building only not land.

 

Before the mortgage is granted I was required to submit a thorough costings including contingency. Once approved I was told I could have as much of the mortgage as I wanted. I have initially drawn a little under 50% and expecting this to get me to a water tight stage.

Subsequent advances will be subject to another valuation and fee. To check the money has increased the value of the property!

I will probably draw the remaining funds in one go so as to minimise hassle and fees of a valuation. However you only need to make repayments on the funds drawn so not much point having thousands sat in an account whilst servicing the debt.

 

I am with Ecology building society who have been excellent so far.

[ultramods]

I have an accelerator mortgage from Furness Building Society arranged through Buildstore.

 

Buildstore (Build Loan) have an estimator that estimated the cost of building our house including the cost of each of the following phases: foundations, wind and watertight, first fix, second fix and a final completion stage.

 

Furness building society then appointed a surveyor to visit our plot to be able to provide a value for the finished house. Furness need to be satisfied that the house would be valued the same or greater than the land and build cost (including all professional fees)

 

Next Buildstore created a plan detailing how much money will be released before each stage, e.g. 20k to complete the foundations. They would only provide a maximum of 80% for each stage, however this was fine as we already owned the land which means you get 80% of the land cost at the beginning which really helped up to get going.

 

After each stage is completed our architect completes a report and submits it to Buildstore. A technical audit is then completed by the surveyor that was previously appointed by the building society. Only once the technical audit is approved can we obtain funds for the next phase.

 

During the build we only pay the interest on the mortgage. Once the build is completed the building society will transfer us onto one of their normal mortgage products.

[nubbins]

A belated thanks for the info, it sounds like Ecology could be the one for me.

[nubbins]

Hi All,

 

Another question, I had a Buildstore  mortgage advisor on the phone today going through the facts and figures of a mortgage they have found for me. I have a mortgage advisor who normally sorts out my mortgages but thought I would have a look at these as they obviously have expertise in the self build arena. I liked the fact they were on the ball with all the little details and I am happy to pay a £695 fee for that knowledge but what I did not like is a potential £1500 insurance premium payable to BuildLoan Ltd. Is this a common fee as I have never heard of it and am a bit dubious, if its a requirement for most lenders then fair enough.

 

Thanks in advance

 

[eandg]

Is it not the additional fee (effectively a premium to the lender for the additional risk involved) that you pay to access an advanced stage payment mortgage?

[nubbins]

Yes that's basically how it was explained but I was wondering if this a common fee/insurance for self build mortgages