Self build mortgage

Hi everyone,

Just looking for some advice on obtaining a self build mortgage. My salary is 25k and my partner earns 18k. We have no debts but also no savings. We have our site now and got our full planning permission, site value of 40k. The plan would be to save for the next 10-12 months before appling for a mortgage.

The intended is house will cost 130-140k, 2000sq feet.

We intend to book an appointement with AIB for some info but we're not confident in the current market of obtaining a mortagge so any advice would be appreciated, also do banks count your site value with the application and will it help towards deposit.

Thanks

Two quick questions: -

• Did you buy the site or was it given to one of you?
• Are you paying rent at present and if so, how much?

The site was gifted to me and currently paying rent 500 p/m. We aim to have at least 5k saved before we apply but realise that probably would not be sufficient if the site is not taken into consideration,

Thanks

Hi George30

I would say that the bank will look for you to have 10 to 15% of the cost of the build in savings.

The amount you get might be 4 x your salary and 3 x your partners. Other way they used to calculate approval was that repayments could not be more than 40% of your combined take home pay. Not sure if these rules still apply. You will both need permanent jobs to get a mortgage now.

Its also usually a good idea to have 10% of the cost to allow for things that go wrong or when you go over budget.

The bank will also require your architect or engineer to complete an estiamted cost of the build and sign this off. Eg costs of the base, blocks to roof level, roof, first fix electrical/plumbing etc, 2nd fix etc etc.

Even if you qualify for say €150K for example they will still only loan you the costs of the build, which you reckon is €130/140 k.

maybe make an appointment with each of the banks and see what they have to say. Might be worthwhile going through a broker to get the best interest rate.

Make sure you solicitor has good experience of self builds so it doesn't slow you up waiting on stage payment cheques

The amount you get might be 4 x your salary and 3 x your partners. Other way they used to calculate approval was that repayments could not be more than 40% of your combined take home pay. Not sure if these rules still apply. You will both need permanent jobs to get a mortgage now.

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These salary paramaters are well gone. I don't know of any Bank still assessing on a salary mulitple. Not that there are too many institutions open for new mortgage business. Banks now use an individual Repayment Capacity Template to assess ability to repay the loan, plus meet living expenses on a senisitised rate (normally 5%).

Thanks for the advice guys - I'll speak with the banks, save hard and hope the banks are open to business with me next year.