Staged release of mortgage funds
The main difference between a self build mortgage and a house purchase mortgage is that the money from a self build mortgage is released in stages as the build progresses rather than in one single amount. The scheme can also provide funds in advance to purchase the land and build materials, making the whole flex build process much more flexible. You may receive up to 95% of the purchase price or value to buy your plot (whichever is lowest). After this, the money for the build is released in a series of stages.
As with standard house mortgages, the maximum sum a lender will be prepared to advance is based on the ability of the clients to repay the mortgage. This is based on income multiples and affordability.
Typical stages for self build projects
- Purchase of (or security on) land
- Foundations laid
- Up to eaves level
- Wind and watertight and roof tiled
- Interior walls completed (plastered out)
- Ready to move in
Typical stages for renovation and conversion projects
- Purchase of existing structure
- Completion of structural overhaul
- Completion and upgrade of load-bearing structure
- Interior walls completed (plastered out)
- Installation of services (kitchen, bathroom, electricity and gas)
- Ready to move in
Important points
- Land Funding will be released when outline planning permission has been granted
- Build Cost funding will be released when full detailed planning permission and building regulation approvals have been granted
- Interim Valuations may be carried out prior to release of funds at build stages
- Structural work undertaken must have a suitable structural warranty during construction, available through Self-builder
- Site Insurance, also available through Self-builder, must be in place prior to release of funds
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