Self build / renovation mortgage

[Leeroy]

Does anyone have any info on self-build type mortgages? We're looking into doing a renovation and need some hefty sums upfront in addition to the house purchase itself. The high street lenders can't help unfortunately, we've got an awesome rate with Woolwich on our current house

I've looked into various options but it seems the market has shrunk somewhat - the most likely candidate at the moment is Buildstore but I'm keen to see if a broker can help reduce costs for us by going direct to the lenders...

I'm guessing this might be a good one for a particular member on here

[AK350Z]

You need to PM the Sarnie.

[Lexx]

As said above. Drop Sarnie a PM.

[Watshot]

Homebuilders & Renovators show at the N.E.C Birmingham this week. Has a couple of seminars on financing projects at various times on different days. Appear to be four companies exhibiting under 'Finance, insurance & mortgages', (One of which is Buildstore).

 

Link: http://national.homebuildingshow.co.uk/ ... rlist.aspx

 

There's a regional show at Sandown Park in Surrey this June as well.

 

Best of luck.

[Stew]

If you can share your findings here. Obviously just outlines and stuff rather than actual figures.

 

I am still looking at a build it project (If my mate will sell me the land) that I'd need to finance. My parents said they'd finance the build for me however I still need to borrow to pay them back and haven't looked into when you can borrow etc.

 

It's good to learn together!

[Sarnie]

Plenty of High Street lenders still providing these types of mortgages, you just need to know where to go

 

There are, as you would imagine, a lot of complications with Self Build mortgages such:

 

Max LTV is usually 80%

You will need to own the plot of land already

You will need to be able to fund the project until the property is completed up to First Floor Level.

 

Here is some blurb from a lenders site:

 

Are acceptable but the construction, whether by the customer or self build group, must be monitored by a suitably qualified consultant employed by the customer/group who will provide the necessary construction certificates.

Flats, maisonettes and semi-detached properties are not accepted.

We will consider a maximum LTV of 80% of the valuation figure subject to normal lending limits.

The loan is released in instalments (first always to conveyancer) subject to the interim value determined by our valuer and receipt of an interim certificate from the consultant. A minimum of 10% of the loan is retained until the property is complete. A final valuer inspection is required together with a Final certificate from the consultant.

Customer must be able to buy the plot and proceed with building works up to the appropriate stage before the first instalment is released.

..

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If you need more specific info, just let me know

[Stew]

Ahhhh so it's first floor..... I wasn't sure on that.

 

Basically if I was doing it it'd be

 

Equity in my house would buy the plot

Build using funds from house sale

Any additional funds from bank of Mum and Dad - best rates around!

Mortgage when complete (or first floor) and pay back my folks

 

 

I think that would work.

[Leeroy]

Good heads up on the shows Whatshot, I'll check out those exibitors.

 

As always Sarnie, I bow down to your financial expertise

After looking at this over the last couple of days though (and I might be wrong, it has been known ) some lenders do seem to lend on the existing house/property AND provide the necessary funds for renovation. Albeit that the renovation funds seem to be released in stage payments (advance or arrears) once pre-decided elements are complete.

Buildstore are a bit pricey at 5-6% though. Ecology Building Society (energy efficient builds) are a better option by the looks of it, at 4.9% with a reduction of between 0.5% and 1.5% depending on the 'greeness' of the build when finished.

One of the main problems seems to be that they want to see planning consent (WARNING! WARNING! LISTED BUILDING!!! ) and architectural drawings in order to put a value on the completed house. The drawings are easy as I can do them myself but the planning will take a couple of months to get through and we won't be buying the house until I know I can do what i need to, so it's at our risk...