Mortgage draw down

M

Mackky_101

Registered User
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Hi all.

Just looking into bank of Ireland mortgages with the hope planning will be permitted soon...

A question, But the land we hope to receive is currently probate (which usually takes aprox 6months to finalise)... is it a thing that say with planning permitted in the next week or so and mortgage approved we can start the build without drawing down the mortgage (as land isn't signed over yet) and work away at the house with whatever cash etc we have (father is building the house) and when land is signed over we can then start drawing down the mortgage as needed? Or is it a thing you have to start drawing it down from the start as engineer is signing off the stages etc? Just heard a few different peoples opinion and very unsure.

Thanks
 
Sorry, my earlier comment was a bit tongue in cheek.

Completely separate to the mortgage, I've assuming you've checked any tax implications for the estate on applying for planning permission on land that's in probate (if granted, it will change the value of the land).

For a self-build, it's perfectly normal for people to have money saved up to start the build. However, the mistake that they often make is to get on with the build, and only go to the bank when they need money. If you've enough cash to get to wall plate level, there's no point asking the bank for a mortgage to put on the roof if you don't have sign-off that the foundations & walls were built properly, and exactly how much they cost. You need to follow the correct procedures from the start, and it won't be an issue to get the mortgage when you need it. That will mean having an 'assigned certifier' to sign everything off for the bank.

You mentioned that your father will be doing the building? Is he a builder by trade? i.e. can you get all the details you need of financial costs up front, etc. Banks like having contracts in place before any mortgage is drawn down, but family might not be happy with contracts.

Talk to BOI, and get a mortgage advisor assigned to you. What you want is to have a single contact name that you can go to for everything throughout the entire process. Don't mention the probate piece initially, but the general details - you're waiting on planning permission, have enough to start, etc. And ask at what stage do you need to apply for the mortgage. You might be able to apply for a mortgage now, and there would be a condition that the site is transferred into your name before any drawdown.

I always suggest to people to keep some of their savings to finish the house. It's common for there to be a snag with the very final drawdown, or an unexpected cost arises along the way.
 
Thanks very much for your help.

Yes my father is a building contractor and its his own company so should be able to do a contract etc. I have been onto a broker and he believes its no problem that if I had the mortgage was approved I could build as much as I want if my father was happy with this and then when land is signed over etc I can then start drawing it down and paying my father as needed but just wanted to see if anybody else had an opinion on this and make sure it is above board.

In regards to the TAX implications on the granted site, I was unware there was an extra tax? I knew about stamp duty, CGT and CAT so you reckon there will be more on this?

the fun of building :)
 
mairead_mcc said:
Thanks very much for your help.

Yes my father is a building contractor and its his own company so should be able to do a contract etc. I have been onto a broker and he believes its no problem that if I had the mortgage was approved I could build as much as I want if my father was happy with this and then when land is signed over etc I can then start drawing it down and paying my father as needed but just wanted to see if anybody else had an opinion on this and make sure it is above board.

In regards to the TAX implications on the granted site, I was unware there was an extra tax? I knew about stamp duty, CGT and CAT so you reckon there will be more on this?

the fun of building :)
Click to expand...


RedOnion said:
Sorry, my earlier comment was a bit tongue in cheek.

Completely separate to the mortgage, I've assuming you've checked any tax implications for the estate on applying for planning permission on land that's in probate (if granted, it will change the value of the land).

For a self-build, it's perfectly normal for people to have money saved up to start the build. However, the mistake that they often make is to get on with the build, and only go to the bank when they need money. If you've enough cash to get to wall plate level, there's no point asking the bank for a mortgage to put on the roof if you don't have sign-off that the foundations & walls were built properly, and exactly how much they cost. You need to follow the correct procedures from the start, and it won't be an issue to get the mortgage when you need it. That will mean having an 'assigned certifier' to sign everything off for the bank.

You mentioned that your father will be doing the building? Is he a builder by trade? i.e. can you get all the details you need of financial costs up front, etc. Banks like having contracts in place before any mortgage is drawn down, but family might not be happy with contracts.

Talk to BOI, and get a mortgage advisor assigned to you. What you want is to have a single contact name that you can go to for everything throughout the entire process. Don't mention the probate piece initially, but the general details - you're waiting on planning permission, have enough to start, etc. And ask at what stage do you need to apply for the mortgage. You might be able to apply for a mortgage now, and there would be a condition that the site is transferred into your name before any drawdown.

I always suggest to people to keep some of their savings to finish the house. It's common for there to be a snag with the very final drawdown, or an unexpected cost arises along the way.
Click to expand...
Just with the land, You seem to have a good knowledge on this kind of stuff.. Basically the land is being signed over from a deceased uncle to my partners fathers name. when this is sorted and signed over to the father he is then signing the land over to my partner. The land was only repriced this year before probate. Wonder will this make any difference?
 
mairead_mcc said:
The land was only repriced this year before probate. Wo
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It's a fairly complex area, and not something I'm comfortable with, but it might be worth checking it out further to be sure.

Basically at the time the uncle passed away it was just a piece of land. Let's say it was worth 10k. If you apply for planning permission and it's granted, let's say it's worth 80k. There's a gain of 70k along the way which could be taxable to the estate, or your partner's father, if it's not planned correctly.

Not something I look at, but I've seen it go wrong before.
 
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