The self build mortgage process

[Jolly Man]

Hi there,

I have a couple of queries relating to the mortgage process, i know the questions may sound silly as i have very little experience in this area. Have read all the previous posts and are all very informative, but basically i am due feed back on my planning application on the 19th of next month, i know i can get approval in theory before planning has been granted.

1. How long would the process from there take once we do recieve planning?

The land owner seems keen to get his money! The project will be a self build/direct labour and as we are a young unmarried couple we have no savings as such to work with, our annual income is about 75k and have money tied up in the SSIA.

2. The site value is 120k but is worth considerably more do the bank's value the site themselves when you are getting approval for the mortgage and if so is it common for them to value it above the price you are paying for it?

I know it is not possible to get a 100% mortgage on a self build and EBS seem to offer 90% the value of the site and 100% the value of the construction. So there is 10% of the site value and the inital construction phase to subfloor that we would have to try and finance ourselves. Say in and around €18k on top of this there will be stamp duty for the site, planning services fees and all other connections to mains, drilling the well and so on. So we could be looking at having to finance 25 to 30k on our own which we would not have!

3. Am i right in what i say above about the financing and if so what options would we have to finance the build to that stage?

4. What do the bank require in order for them to get an idea of the cost of the house at different stages? Is it a bill of quantites from a quantity surveyor priced by the builder? And signed off at each stage once the engineer say's that it is complete?


Thanks for reading the above, all replies are greatly appreciated

Regards,
Jollyman

 

[MortgageBrkr]

Hi Jollyman,

1. Once you get planning permission, provided you have all the necessary documentation you will receive an approval in principal with in 48 hours.
You will also require life cover and building insurance.

2 The lenders will require an architect or engineer to complete a report outlining the various stages of construction ie foundation, walls etc
The value of the property will be based on the what it is worth when completed i.e 250- 300K
You will also need to get a valuation done by a valuer on the lenders panel.

3. You will be able to draw down the fund in stages i.e First stage 20-30k for foundation. Second stage walls and roof 40k etc....

4 Is it a bill of quantites from a quantity surveyor priced by the builder? And signed off at each stage once the engineer say's that it is complete?

Yes, you will require a foundation cert, stage payment cert to be completed by a qualified architect or engineer.

Hope the above helps.

 

[Salmon]

Can you get the first stage payment before you start the foundations? I've been told that you dont recieve the first payment until the first cert is sent in when the foundations are in, that means that you must need the funds yourself to put in the foundations? is this true?