Difference between mortgage applications

S

Siobh

Registered User
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Just wondering is there a difference in the mortgage application process for buying a house or building your own??
We have been approved for a mortgage to buy a house but have now found the most perfect site we would rather buy and build our own home.
Will this cause hassle with our mortgage?? Do you think we will have to reapply?
 
You will have to tell your lender. When you get mortgage for a house, the bank needs a valuation to say that the house is indeed worth the mortgage you are getting for it. I presume with a site and potential house the bank will need proof that the resulting house will be worth what the mortgage is...Whether banks are any more reluctant to lend for a site and a build than an existing house I don't know...perhaps others can enlighten you more..
 
yes you will definitely have to re-apply. building a house will involve you in drawing down what are known as stage payments at various stages of the build, this will enable you to pay the builders as you go along, no builder will wait until the house is fully built to be paid.
 
thanks guys! if anyone else has been in this situation would love to hear what u went through!
 
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