Self Build Mortgages
Secure a self-build mortgage to purchase land and build your dream home in the UK. We make the self-build mortgage process simple and painless, leaving you to design and build your dream property.
A self-build mortgage is a mortgage that allows you to borrow money to buy a plot of land and build a house on it. The main difference between a self-build and a traditional residential mortgage is that with a self-build mortgage, the funds are released upon reaching certain stages in the construction of the property.
Typical stages of a self build mortgage:
1. Land purchase – the money to purchase the land where you want to build your property.
2. Preliminary costs and building foundations/substructures – setting the foundations, project management, plant hire and connection of utilities (if required).
3. Construction to first floor level.
4. Construction to roof level- inclusive of roof.
5. Installing of all windows and doors to ensure the property is wind and watertight.
6. First fix and plastering – getting the plastering of the building complete as well as the first set of fixtures (pipes for plumbing, meter box installation, cables etc)
7. Second fix and completion – adding the final fixtures and fittings to the building so that it becomes a home.
Self-build mortgage lenders will have certain criteria when it comes to the location and construction of your self-build property, as well as the usual host of affordability, income assessments and credit checks. Some other self-build specifics you’ll need to have ready to show lenders include:
After your property is built, habitable and valued by a RICS qualified surveyor you’ll be able to remortgage to a traditional residential mortgage and repay the self-build loan.
There are multiple benefits to a self-build mortgage with the most common one being you can build the exact house you want in the location of your choice. This means there’s no need to try and fit your dream house into an existing building by renovating.
Another benefit of a self-build mortgage is that you only have to pay stamp duty on the value of the land you’ve bought, rather than the total value of the land and property. This can means big savings for those looking at more expensive, completed houses.
This will depend on how you want to finance the build and how much you have in savings. As with all mortgages, you will need a deposit and some people choose to sell their current property to release equity for the deposit on their self-build loan. If you’d like to continue to live in your current home while your new house is being built there are options such as a bridging loan, or if you’ve paid off your current mortgage, you can remortgage your current property.
The best time to start thinking about finance is when you decide that a self-build property is something for you. Just like looking for a house, you’ll need to know what lenders will let you borrow before you start to design your dream home. After all, you don’t want to design your dream home and then find out it’s not affordable.
As with all financial products, this will depend on your circumstances so get in contact with us and we can give you an indication after a conversation with one of our advisors. We can then follow up with a more accurate number once you’ve decided on a number of factors which we will run through with you. We have experience in arranging self-build mortgages and residential conversation/renovations from £750,000 to in excess of £2,000,000.
The amount you can borrow isn’t limited by the current value of the land and you can typically borrow up to 80% of your project costs.
The construction method of your new house won’t necessarily affect your chances to find, and be accepted for a self-build mortgage however it can limit your borrowing options depending on the construction method you choose. Most modern and traditional building systems will be perfectly acceptable and we will work to find a lender that can work with your chosen construction method.
The cost of materials, labour, equipment and the land it sits on are usually the first costs you consider when you think about building your own property. However there are some other costs which are usually forgotten about, these include:
Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured upon it.
There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.
A percentage of the mortgage amount may be charged depending on individual circumstances. A typical fee is 1%.
Coreco Commercial is a trading style of Coreco Specialist Finance. Coreco Specialist Finance. Registered Office: 117-119 Houndsditch, London EC3A 7BT. Registered in England Number: 06851546
Coreco Specialist Finance Limited is authorised and regulated by the Financial Conduct Authority.
Some types of finance offered by Coreco Commercial are not regulated. Please contact us for more details.
Coreco Commercial advisers are experienced mortgage advisers but we are not tax advisers. Please seek independent tax advice if required before you decide to proceed.
We know that all our clients are unique, and therefore the finance you require needs a different approach. We pride ourselves on providing a client focussed journey built around your needs and goals.
Our team always expresses their professionalism through their authenticity, high level of work ethic, and can-do attitude. We always find the best way for our clients to succeed.
Our progressive and forward-thinking outlook allows us to guarantee an exceptional level of innovative advice and service, ensuring an effortless, client-centric journey in the ever-changing financial world.
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