Mortgage to build a home

B

brokeagain

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Hi,
I have a question on mortgages. My partner and I would like to build a house in the next couple of years and have watched a number of sites in our area been sold for good prices.

We would like to buy a site now and build next year some time. Is it possible to get a mortgage for a site and house and not draw down on house til next year or year after?

Thanks,
 
Yes, but you wouldn't really tell the bank that you are not building straight away otherwise they might prefer to sell you a personal loan and later a mortgage when you ARE building.
 
Would I have to pay ful mortgage repayments even though only the price of the site was drawn down??
 
to get a mortgage for a site and new build together, the site would have to have FPP and the cost of the house to be estimated either by a quanity surveyor engineer or builder. Usually you buy a site subject to planning, you pay a deposit for the site (eg 5K) to the EA and then apply for planning, once planning is approved, the sale of the site can go through, and you pay the balance of the site price, this can take anything up to 9 months, while you are waiting for planning approval, you would have all the costs to build the house sorted for the bank and they can finalise your mortgage, you then draw down the money as you require it for each stage of building. The % amt for the mortgage varies on if its site alone which is 80% of the value or if it comes with a building agreement, then its 92% (I think).
If you can get a site with FPP, you can attach a building agreement on to the sale (with the sellers approval) which will reduce your stamp duty liability..(this is legal, its like if you were buying a house in a estate development)
 
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