With
a traditional self-build mortgage, stage payments are made
in arrears which means that you either have to secure a bridging
loan or fund the initial stages of your build yourself. With
an advanced flexible self-build mortgage,
stage payments can be made in advance of each stage, thus
helping you to avoid the cash flow problems common in self-build
projects.
The advanced flexible self-build mortgage can be used for
both traditional and timber frame builds, as well as for renovation
and conversion projects. Typical stage
payments will include land, foundations, wall plate
or erection of the timber frame, watertight/roof on, plastered
and completion.
As with a traditional mortgage, how much a lender will be
prepared to advance you will depend upon your ability to repay.
The usual calculation will be worked out on multiples of the
incomes of the people who will be responsible for repaying
the loan.
The key features of an
advanced flexible self-build mortgage include:
Up
to 95% of the land purchase price or valuation.
Up
to 95% of the building costs.
Up
to 95% of the end value.
Stage
payments can be made in advance, although you should
be aware that sometimes a higher percentage advance
fee is imposed, usually when a client is borrowing up
to the 95% maximum at land stage.
Funds
on land purchase can be released with Outline Planning
Permission.
The main benefits of this
type of mortgage are:
You do not have to have a bridging loan and therefore
this removes potential cash flow problems.
It
helps to speed up the build.
You
can remain in your existing home during the construction
phase.
Funding
for the land purchase will become available once
Outline Planning Permission has been received and the funding
for building costs becomes available once full Detailed Planning
Permission has been granted. During the build stage, interim
valuations will be made prior to funds being released and
all new builds must have a suitable structural
warranty such as an Architects
Supervision or NHBC Guarantee.
Before any funds can be released, site
insurances must be in place.
None of the information on this website is intended to promote any specific mortgage product or provide mortgage advice. Justcredit.biz is a non-regulated trading name of Financial Services Net Ltd.
