Put Finance in Place

How to finance a Self-Build Mortgage 

Unless you are in the lucky position of being able to 100% fund your project with cash, you will need to raise money.  Builders usually expect to be paid monthly, so a shortfall or a badly planned payment release schedule could cause unnecessary difficulties further down the line.

Buildstore

Buildstore offers end-to-end services for prospective self-builders.  This includes advice on budgeting, findng the best mortgage for you, and offering structural warranties and insurance.  They are happy to become involved at an early stage, unlike most lenders.  Be wary of their guides on budgeting. Build costs are very location and site specific and our advice is to always engage a quantity surveyor. 

Ecology Building Society

A first point of call when seeking a mortgage could be the Ecology Building Society. Hebhomes has partnered with this innovative company to help offer tailored mortgages specifically for self-built and off-site manufacturing projects. They may not be the best option for you, so talk to Buildstore if you are not sure. 

The Lending Channel

In addition to the Ecology Building Society, we have also partnered with Perth based national broker,  The Lending Channel .  Using the services of a good, long-established broker will allow clients to gather all relevant information, putting them in a position to make an informed decision on the best way forward at an early stage, and offer them more options. The lending channel can be contacted through this email address: enquiries@thelendingchannel.co.uk

With self-build mortgages being a fairly specialised product, only a small number of lenders offer these types of facilities. After an initial online or telephone enquiry, the broker will arrange a telephone fact find appointment, to fully assess your circumstances:

•    Identify and acquire the land. The land will need full detailed planning permission before you can borrow any money against the site. You can borrow against the land to help with the acquisition, but this may severely restrict your cash flow as the project progresses.
•    80% - maximum amount you can borrow against the property at any time during the build process.
•    Funds release –  (usually) after critical stages of the construction is complete.

This type of self-build mortgage is only used to fund the building of a client’s main residence. Other funding options are available should the client be planning to build any type of property for investment – either for Buy to Let or for Holiday Lets. The Lending Channel can also help with this commercial finance. 

Self-build Mortgage broker fees:
•    £495 on full application to the lender (once full fact find and assessment has taken place)
•    £1,500 due on mortgage offer

Customer Advice:  Your home may be repossessed if you do not keep up repayments on your mortgage.

Self Build Wales Scheme

The Welsh Government has recently announced that they have expanded their Self Build Wales Scheme (SBW) to include individuals who find land they wish to build their home on. If you are looking to build in Wales, you may be able to borrow up to 75% of the land purchase costs, plus 100% of the build costs. The 25% deposit on the land must come from your own resources. Through this scheme you can also find the right plot for you, and even be linked with a suitable contractor for your build. 

Further information on the scheme can be found here.