When considering a mortgage for a bespoke build, you need to understand self-build mortgages, as traditional property mortgages don't operate in a way that makes them viable for a self-build project. While most mortgage lenders release funds on the legal completion of the sale of a property, a self-build mortgage offers payment in stages over the build, allowing those who don't have the funds to pay for the build outright to manage their cash flow. Specialist providers offer most self-build mortgage products, which means fewer are available than standard mortgages.
Before applying for a self-build mortgage, you should consider the following: When applying for a self-build mortgage, you will need to provide plans and a breakdown of your build costs, including your plot cost. Additionally, it's a good idea to set aside an emergency fund for problems you might encounter later on. Interest rates are generally higher than a standard mortgage, and lender arrangement fees are also different. However, after your self-build is habitable, you may be able to switch lenders at a lower interest rate.
Is a self-build project suitable for you?
Buying the right home at the right price, in the right location, can be a long and painful process & lots of us would love to be able to build our own home. The primary benefit of building your own home is that you can tailor it to suit your needs today and into the future instead of constantly modifying it over the years. If you choose the self-build route of owning a home, you will need a self build mortgage to finance your dream home. Generally, if you decide to build your own home, you have three options or some combination of all three.
First of all, you might choose to do all the work yourself - especially if you are pretty handy with building and construction - and perhaps hire electricians and plumbers as needed. Alternatively, you can manage the project yourself and hire an architect, a surveyor and builders to build the house for you. Last but not least, if you want to be completely hands-off, you can hire a contractor to oversee the project and hire employees for the project. However, this route is more expensive but usually quicker and often less stressful.
Unless you have a considerable amount of money in the bank, you will need a mortgage. However, you will not get a standard mortgage, which is usually reserved for residential properties; you will instead need to get a self build mortgage provided by a specialist mortgage lender.
Self-build mortgages are not straight forward and getting the finance right is essential
Terms & Conditions
Lewis Shaw (FCA registration number 927754) trading as Shaw Financial Services is an appointed representative of King Mortgages Ltd which is authorised & regulated by the Financial Conduct Authority, FCA registration number 803561.
There may be a fee for arranging a mortgage. This will typically be £499.
Think carefully about securing other debts against your home
Some forms of Buy To Let mortgages are not regulated by the Financial Conduct Authority. The guidance &/or advice contained in this website is subject to the UK regulatory regime and is therefore restricted to consumers in the UK. As with all insurance policies, conditions & exclusions will apply.
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