How to fund a self-build

L

Louis

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We want to move from Dublin to the country.
Our home in Dublin is mortgage free and probably worth about €900,000
We have a site and it will cost about €400,000 to build - allow another €100,000 for overspend in an extreme case.

Ideally we would like to borrow the €400,000 and build the house.
Then move into it from our Dublin home.
Then sell the Dublin home. (We will put the Dublin home on the market within about 3 months of the selfbuild being finished.)

Will a lender lend us stage payments up to €500k on the security of our home?

Or do we have to sell first to get the money and then rent while the house is being built?

L.
 
Louis said:
We want to move from Dublin to the country.
Our home in Dublin is mortgage free and probably worth about €900,000
We have a site and it will cost about €400,000 to build - allow another €100,000 for overspend in an extreme case.

Ideally we would like to borrow the €400,000 and build the house.
Then move into it from our Dublin home.
Then sell the Dublin home. (We will put the Dublin home on the market within about 3 months of the selfbuild being finished.)

Will a lender lend us stage payments up to €500k on the security of our home?

Or do we have to sell first to get the money and then rent while the house is being built?

L.
Click to expand...
A friend of mine embarked on a similar scenario some years ago. He was mortgage free and decided to move. He purchased his second property and decided to remain in his original property for convenience while waiting on his new build property to be completed. This was to take a year approx. He borrowed most of the cost of the new property. Once he had moved he planned to sell the original property and clear his new mortgage.

Unfortunately for him this was in 07/08 right as the property crash occurred. He then found himself taking a hit of probably about 50% of the value on BOTH properties. He went from being mortgage free to having a big debt secured against two massively devalued properties. It was only last year that he felt he finally got out of the financial hole he found himself in.

I'm not suggesting that in any way do I believe we could be in for a repeat of that property crash, just highlighting his scenario to give you food for thought.
 
Just a thought but could you not get a €500K mortage on your existing Dublin Property and use that to finance the build ?
 
Worst case you may need to sell, rent and build. Hopefully not into a caravan a.la Grand Designs!! But look for rental property nearby the build or possibly a high end log cabin you could use for an office afterwards on site would work out?
 
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