Financial options when buying a site

I am looking to buy a site to build a home on at present. My current house is valued at 370k and has an outstanding mortgage of 148k I am loking for a site at present but am wondeirng how to finance the purchase without selling my current home. Even if I buy a site subject to planning permission it will still have to be paid for if and when the permission comes through.

How do others get around this difficulty?

You can either raise the money by remortgaging your house or by getting a standalone mortgage on the site. For the latter option you'd need a minimum of outline planning permission (First Active only - all others require full P/P) and you would need a deposit of between 10-20%; this can be from an equity release on your current home. For either option the total debt must be within the lender's income criteria.

Sarah

www.rea.ie

I am in a similar situation to you. I have found a site, hoping to submit planning permission application in the next month which will mean we will have to pay €200K for site when pp comes through.
I have a house worth about €240K with mortgage remaining on this house of €130K. The bank have offered an equity release of €167 on my house.

Have you spoke to the bank about another mortgage for the site?
We have to come up with 10% ourselves as banks / BS won't give 100% mortgages for sites - we are lucky to get 90% with EBS.

Also I am taking out a second mortgage with a partner and for some reason they are not too concerned with my existing mortgage. I will be keeping this house and renting it when the new house is built.

You may have an option of paying interest only on the site - we have 6 months interest option.

We will be under a lot of pressure to keep both going but hopefully it will be well worth it.

Talk to a mortgage adviser - they are used to this situation. I found Mortgages Direct very good.