Best way to finance site purchase & new house build

J

jerseyboy

Guest
I would appreciate some advice please. I have been offered a site for 125k which I would like to buy with a view to building a new house. Ideally I do not want to start building new house for about a year (subject to obtaining planning etc). I am seeking advice on how to manage the 'transition finance'. I am currently a homeowner. My current financial situation is as follows:
Recent house value 430k
Mortgage balance 95k (15 yrs left)
Car loan 15k (4 yrs left)
Personal loan 9k (4 yrs left)
Credit card 2k
2 SSIA's coming in at 25k
Combined salaries 100k
I do not want to sell my current house until new house is ready. Aside from site cost, new build should cost in the region of 250k, therefore site+new house comes in at 375k (very roughly).
Is there anyway I can finance buying site and building new house without immediately selling my current house. Could I remortgage first for site, then top-up for new build? I would like to clear off as much as possible of all my loans when I finally sell current house - the plan in the long run is to be as close to being mortgage free as I can. Any suggestions would be appreciated.
 
how much is it going to cost to build the house?
what ages are you?

If you qualify for a 30 year term, I see no reason that could prevent you from borrowing up to €500k across both properties.

I assume you are purchasing the site subject to planning permission being in place?

You can topup or remortgage to cover the site purchase cost and again when you plan to start building. Either option is viable depending on what the best rate deals available at the time.
 
The best way would be to remortgage/top up to release enough equity to buy the site and then draw stage payments on an interest only basis on the new house build as and when you start construction - that way you're not going through the cost of a second remortgage when it comes to building and, if you wish, you can clear the lot on the sale of your current house.

Sarah

www.rea.ie
 
Thanks Guys for your advice. To answer previous questions - yes, site will be purchased subject to planning permission. My age is 36 and spouse is 37. New house build should cost in region of 250k. One further question - we will need to raise a deposit for site first (probably 10k) - should we take out a personal loan for this or should this be a top-up loan on current mortgage? Alternatively, we could use some of our SSIA money to pay initial site deposit. Any ideas?
 
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