Self Build Mortgage

If you have tried to find the right house in the right location you will know that it can be difficult to say the least. But maybe that's because the house you are looking for hasn't been built yet. You could spent an age looking round for the right property or you could get a self build mortgage and create the house of your dreams yourself.

If you obtain the right self build mortgage obtain a plot of land and materials and employed labor direct you are buying a house at near enough cost. In essence you are paying what a house developer has to pay without the marketing, sales costs and profit margin. There's even an advisory service to help you get your prospective project off the ground. They understand why most people go down this particular path to a new home and it's rarely to save money. The main motivation is to have the home of their dreams.

The first thing to do is buy a plot of land preferably one with planning permission for development already granted. This means the local authority has agreed that building can take place or detailed permission where the actual design has been agreed. Building plots can be found in local news papers, estate agents, on the net or you might have seen a plot not being used and approach the owner of the land direct.

The next step is to finance the building of your new home. Fortunately self-building has become common enough that over 30 banks and building societies now offer loans to self-builders. These lenders will usually lend between 25% and 80% of the land's value and between 65% and 95% of the building costs. Any money for construction is usually paid in stages once key aspects of the construction are completed.

The lender normally advances the money for such projects in five steps. This is to stop cash flow being a problem. You will need to plan carefully the costs that may be incurred in building the house. You won't get the loan unless you've done this and your installments might not be sufficient to cover the costs if you have underestimated your liabilities.

If you do decide to selfbuild be aware of your limitations. Don't try something you are not absolutely sure you can pull off. There is too much money at stake. A surveyor,planning consultant and architect are absolute essentials. Get a solicitor to draw up contracts between yourself and your builders and should you not be able to oversee building work on a daily basis it is advisable to employ a project manager to make sure the job is done right, on time and within the agreed budget.

Self Build Mortgages :