For those who want to build their own home, a conventional residential mortgage is not an option. Instead, the self-builder would need to apply for a self-build mortgage. Not every lender is active in the self-build mortgage market and those that are, tend to charge a higher rate of interest for self-build mortgages. Self-build mortgages involve regular site inspections, and additional administrative tasks and are deemed to carry more risk for the lender than conventional mortgages do. Also, the self-build mortgage application can take longer to process than average — five or six months is not unusual.
Key requirements
The lender will want to see detailed plans for the property, an accurate build cost projection, and building regulations approval and would expect, at the very least, outline planning permission to have been granted. Rather than the borrower taking on the build, lenders are likely to require a professional builder or a qualified project manager to be appointed.
Deposit and lending criteria
Lenders will employ a professional valuer to assess the property’s market value on completion and during the build. If the mortgage provider considers the project viable, the amount they’re willing to advance will be determined by a range of factors such as build type, construction methods and materials used, and the property’s location. The lender will also take account of the borrower’s credit history and judge whether they can afford to make the loan repayments or not.
As most lenders will not advance more than 75% of the current value of the land and a similar amount against the build costs, the self-build borrower has to find a larger deposit than normal. Some providers require the mortgagor to have bought the land prior to applying for the mortgage.
Stage-by-stage funding
Houses are built in stages, which is why self-build mortgage funds are released in stages. Precisely when each advance is made — either at the beginning or on completion of each stage — depends on the lender’s policy. Where applicable, the first advance is used to help buy the land on which the property will be built. Subsequent advances are made (subject to the valuer’s approval) once the foundations have been laid, at the point when construction reaches the level of the eaves, as soon as the property is watertight, and when the interior walls have been plastered. The final advance materialises when the property is ready for occupation.
What were the circumstances that caused you to initially look for an adviser?
For our mortgage application
How has Jenny Whittle helped you?
With the mortgage application and made the entire process so much easier and speedy.
Have you seen the outcome you were hoping for?
Yes we were able to purchase our property within a two month period
What could they have done better?
Nothing as Jenny was excellent and I have since referred her to others
Jenny's reply
Thanks Linda and for recommending me to your friends! I will be in touch soon to discuss your remortgage.
What were the circumstances that caused you to initially look for an adviser?
We've used Jenny before to help secure a mortgage, so when our fixed term was coming to an end, we were happy to use her services again.
How has Jenny Whittle helped you?
she helped us renew our mortgage.
Have you seen the outcome you were hoping for?
Yes, we're on the best fixed rate we could have achieved under the economic circumstances.
Jenny's reply
Thanks Kate for the review. I hope you have a fantastic special birthday celebration in July!
What were the circumstances that caused you to initially look for an adviser?
We initially contacted Jenny to find out about mortgage options for us.
How has Jenny Whittle helped you?
Jenny has gone above and beyond to support us in our first house purchase together. From navigating mortgage options that suit us and not pushing us into just any deal to thoroughly explaining all the different options when it comes to insurance and protection. She has also been incredibly helpful when our initial sale fell through. She kept us in the loop, every step of the way and responded to our queries and questions with lightening speed and has always been available when we needed her. She has given us exceptional service throughout.
Have you seen the outcome you were hoping for?
Yes.
What could they have done better?
Nothing. Honestly, everything has been perfect.
Jenny's reply
Thank you Victoria and Graham for the lovely review. Fingers crossed for a smooth house move!
What were the circumstances that caused you to initially look for an adviser?
We was after some help in finding the best mortgage interest rates and advice on what type of mortgage to go for.
How has Jenny Whittle helped you?
Jenny helped us by explaining different types of mortgages and their pro’s and con’s. She also managed to find us mortgages that accept price work which was helpful. Jenny managed to get us a rate we was happy with.
Have you seen the outcome you were hoping for?
Yes
Jenny's reply
Thank you James and Jasmine for the lovely review, it's been fantastic to work with you both. I hope the house move goes smoothly!
What were the circumstances that caused you to initially look for an adviser?
Remortgage
How has Jenny Whittle helped you?
Advised on available mortgages
Have you seen the outcome you were hoping for?
Yes
What could they have done better?
Nothing
