Self Build mortgages are for people who want build their
own home and there is a difference between a self build
mortgage and a normal, or house purchase, mortgage. The
difference is that with a self build mortgage, the money
is released in stages as the build progresses rather than
as a single amount.
Finding a self build mortgage can be difficult, as, like
all non-standard mortgages, there are a limited amount of
specialist providers who are willing to lend on a self build
project. Also, the lending criteria can may vary wildly
between the different mortgage lenders.
Some lenders may lend you money to purchase land –
normally around 75% of the purchase price or value, whichever
is lowest. – then the rest of the money for the build
is released in stages. Depending on the mortgage provider,
this may be fixed or flexible but usually there are five
stages of building.
As not all mortgage lenders offer self-build mortgages
it is important to seek independent advice as to which organisation
to apply to. This will ensure that you don’t waste
your time applying to the wrong lender (thereby getting
turned down – which will also not help your credit
file) or getting a mortgage with unsatisfactory terms and
conditions and an unnecessarily high interest rate.
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