Stage Payments on a Self Build Mortgage.

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Brenbo

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Just a query I have about drawn down stage payments on a self build mortgage.

Assuming the site is bought using the first down payment and own money (75/25).

Once one decides to start the build can the second down payment be drawn down then to pay for the site clearance and foundations?

or is it a case of

A certain amount of work need to be carried (i.e. site cleared and foundation in) and then the mortgage broker will release the second down payment to 90% of the value of the work carried out.


Just trying to figure out how much cash ones needs to have on hand once build starts.
 
Brenbo said:
Just a query I have about drawn down stage payments on a self build mortgage.

Assuming the site is bought using the first down payment and own money (75/25).

Once one decides to start the build can the second down payment be drawn down then to pay for the site clearance and foundations?

or is it a case of

A certain amount of work need to be carried (i.e. site cleared and foundation in) and then the mortgage broker will release the second down payment to 90% of the value of the work carried out.


Just trying to figure out how much cash ones needs to have on hand once build starts.
Click to expand...

Hi Brenbo, i am just about to start a self build with stage payments also, i am getting 90% site value as my first stage to pay off the site. The building society have provided me with a breakdown of each stage when money can be drawn down and i get 100% of the value of work done. The four stages are foundations complete, building up to wall plate level, roof complete and practical completeion. Your engineer/architect will be valuing each stage and most have no problem putting down the value you request, and the banks/building socities rarely question it/ask for back up.
 
Hi Brenbo, Jollyman

As someone who is starting to look at selfbuild mortgages - any advice.

Who did ye go with it and whats the best deal out there

any info. appreciated
 
Hi Demps,

I was more tied to the EBS as they offer 92% of the site value and 100% of the construction costs, this for me was the only way to go as it meant i would only have to contribute €25,000 from savings which would leave me with some money also to get the job started and off the ground. Most other lenders only offer 80% of the site value and this would have caused trouble for me. EBS have a specific package based towards selfbuilders there are only three to four main lenders who offer this. Although dont be caught up with their offer for free course of construction site insurance as they are so many terms and conditions and it does not half insure you either. It all depends on the package you want yourself if you can cope with recieving 80% site value and putting the rest of the money up through savings or gift perhaps then your options open up. In terms of intrest rates, tracker fixed or variable it is all a matter of opionion and very hard to predict. You can pay intrest only on the selfbuild mortgage during the actual constrution if you like.
 
Thanks Jollyman

Will hopefully be in the position of not owing anything on the site through my current house sale. Will be moving to vacant relatives house for duration of build. If You hadnt been tied to EBS (My current mortgage provider as well) for site purchase - would Your choice have been different?
 
To be honest i dont think it would have been that different really, it depends on your own financial situation and i suppose with the EBS no longer offering the 3 and 5 year fixed terms this may be a deterent to some self builders who would like the security of knowing what they will be paying back over the next three to five years. In terms of intrest rates its a matter of shopping around but im happy with what we have at the moment as long as we dont have too many more increases!!!!!!!!!!!
 
hi Brenbo,

You can get your architect/solicitor to submit an interim certificate for funds needed for each stage. If you need the money for site clearance then you get architect/solicitor to request the funds and they can be drawn down as long as all the relevant mortgage paperwork is submitted and ready to go.
 
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