Sjk

Self build mortgage without BC approval upfront

Recommended Posts

Hi,

 

It seems self builds may be catching on amongst my relatives, my uncle seen some land in Wiltshire he likes, but needs finance to complete the purchase, preferably via self build mortgage.

 

He spoke to one lender who said they would need BC sign off before they would lend, he has looked at the buildstore who will lend but due to the fees (circa 5k!) he would like to see if he can go direct if possible.

 

Said I would ask on here for him, if anyone knows of a lender who will lend without it.

 

Thanks in advance!

 

Share this post


Link to post
Share on other sites

there's not many lenders you can approach direct outside of buildstore, as buildstore effectively make the product for the lenders, ecology you can do direct but depends on the appropriateness to the project... the other thing to look for is an accelerator type mortgage which pays in stages upfront, that way you can cashflow a lot easier, if you do a self build in arrears you have to find each stage, get a valuation and then draw down, hoping that the valuations match what you've paid out.

You might think the Buildstore fees are high, but they include the insurance, warranties etc which another lender might require in their t&c's but they don't provide directly (so you might end up spending just as much overall) 

Share this post


Link to post
Share on other sites

Thanks.

 

 

He send me through the documents, and its like for like as far as i can see and circa 3x the fees.

 

Cant see what insurance or warranty they have which is of benefit? 

Share this post


Link to post
Share on other sites

We’re just in the process of applying for a self build ourselves. We found there are quite a few that allow you to approach directly. 

Currently we are looking at the Hanley BS. One thing that Buildstore didn’t mention to us when we looked through them is that the Hanley will waive the ERC if you switch to one of their regular mortgages after the build is complete. ( see http://www.thehanley.co.uk/intermediaries/self-build-guide/completion-of-the-project/ )

I’m not blaming Buildstore as they obviously go by what their systems say, but the systems aren’t always right (eg they recommended us a Loughborough BS mortgage as they didn’t have any ERC at all and gave us a KFI with that on. However when we spoke directly to LBS they said there was an ERC but waived if we went to another of their mortgages). 

 

Unfortunately I can’t tell you whether the Hanley requires BC up front as we are hoping to have ours sorted shortly (we are doing a demolition and rebuild of our existing and bc provisionally approved with a few minor things to cover off). My point is, with a bit of internet searching there seem to be plenty of BC who you can approach directly. 

Edited by Damo

Share this post


Link to post
Share on other sites

I didn't need this for our mortgage.

 

But our lender Scottish Building Society lends once the land has planning permission.

 

https://www.scottishbs.co.uk/mortgages/self-build-mortgage#product-info

 

Presumably others will follow the same policy in England.

 

I'm not aware of buildstore fees including any additional insurances or warranties. We nearly had a deal brokered with Newcastle Building Society and the insurance policy was just for the money lend, rather than connected to the build.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now