15/06/2022
Want a Self Build Mortgage
Have a read through the requirements and before you complete the Decision in Principle Questionnaire, which covers all the questions the lenders ask to get you a mortgage, give me a call to discuss your project.
Could save you some time.
We have been advising on Self Build Mortgages for over 30 years
If you wish to have a chat first before you complete the questionnaire then just give me a call 01923 254 760 or 07973 335 793. to be sure you fit the requirements ie Income, Type of Build etc
It takes about 3 months to arrange a self build mortgage and costs between £2000 to £5000 to arrange.
Please be advised you need to be organised and bear in mind this is a paper torture exercise but worth it in the end
The formula is simple
Land + Build Costs + Sweat = Dream Home.
Types Of Self Build Mortgage
1 Arrears, You put in your own money first and build to a certain stage and the surveyor values the work done. Can be problematic, You may have spent more than the surveyor thinks its worth.
2 Advanced, Funds are released based on the cost of the project and agreed upfront so you know you are guaranteed the funds, Ideal for Timberframe where a large deposit is required an advantage when dealing with suppliers.
Some lenders will advance the funds to allow you to buy the land with outline planning permission but bear in mind an insurance premium will be charged to you to cover them in the event you cant get full planning or have to wait for full planning to come through.
Fees associated with Self Build Mortgages
1 Valuation
2 Broker Fee
3 Arrangement Fee can be added
4 10 Year Warranty Cover
5 Site Insurance
7 Inspection Fees, to make sure work has been done
8 Security Insurance if borrowing advanced stage payments ie outline planning.
9 Solicitor Fees
Please see attached our Terms of Business.
We charge £895 to arrange a Self Build Mortgage and this is paid by you to James Blair & Co when we get you a formal written offer.
If you are agreeable to these terms I look forward to working with you.
We don't charge any up front fees.
Before you start
Have your bank statements at hand because all mortgages are based on affordability and near the end of the questionnaire , you will need to complete an affordability section
Let's get you a decision in principle first, complete below and I will get you an answer in a couple of days.
As there are a number of questions feel free to click on the save button at the bottom of the questionnaire and a link will be sent to your email address so you can continue at your own pace.
When you complete the form just click submit
Any queries give me a buzz 07973 335 793. or get me on Whats App.
If I am successful and you wish to proceed we will then move on to stage two.
I will need to go through a full FCA regulated fact find and id verification. I will call you to arrange this.
This will be carried out via Skype or Whats APP
Some lenders require a small fee to start the process £95 £120 paid directly to them.
Deposit
There are some Self Build Lenders say they will lend 95% of Land and Build Costs and we tend to approach them first to see what is available.
But realistically you will need a Deposit
Land Price 20%
Build Costs 20%
Contingency to Cover Build Costs and Fees about 10% to 15% of the build cost's
If you already own the land/Plot the lender will remortgage the land/Plot up to 80% to 85% so you have funds on day one or you may have already started your build
Rule of thumb The MAX you can borrow is 4.5 times joint income, can be as high as 5 Times depending on lender but budget 4.5 times
Build Costs (May 2022 Build It magazine).
2 Bed Bungalow 3 Bed Dormer Bungalow 3 Bed House 4 Bed House 5 Bed House
House Size M (Area). 90 m2 100m2 160m2 200m2 280m2
Material Cost £74,870 £82,290 £99,320 £121,410 £177,460
Labour Cost £49830 £60,730 £67,660 £84,700 £108,090
Plant Cost £25,670 £23620 £29,850 £31,020 £31,790
Scaffolding & Sub Contract Cost £4530 £5,080 £5,970 £5,970 £6,360
Total Cost Excluding Vat £154,900 £171,100 £202,800 £243,100 £323,700
Total Cost per Sq Metre £1721 £1,711 £1,268 £1,216 £1,156
Covid 19 Control Costs £7260 £8110 £8,955 £9,800 £ 10,650
May 2022 Build It Magazine
Please be advised this above is Build route 1 where you employ a contractor to do a turn-key Project and this is what is expected when applying for a self build mortgage.
The lender wants to see a full costing and build route 1 needs to fit with your affordability. because if you go bust during the build they would need to hire a building company to finish the job.
However remember you are only charged interest on what you draw down not what you apply for, so apply for the most and only use what you need
If you use a builder for main structure and then hire subcontractors you could probably save 10% of the build costs
If you Project manage the build yourself and employ subs as you go along then you might save about 20% of the build costs.
If you do everything yourself you could maybe save 25% of the build costs , however the lender will be worried because how will you service the loan if you are working on your own dream home.
Pit Falls that affect the Self Build
If you have and existing High Rent, Mortgage, HP Car loan, Personal Loans, Credit Card Debt etc or committed financial expenditure, this will be deducted from the Max.
You need to be clear of any debt problems, defaults for at least 3 years and if you have been bankrupt, You need to have been discharged for a minimum of 6 years before the lender will consider your application.
Put your life on hold until you get your mortgage offer, please don't get Divorced, Change jobs, go self employed, start a business, apply for a loan, open a new bank account or get a car loan as this will all add to the delay.
It takes about an hour to complete the form. If you need help call me
Once we get the verbal Decision based on the information provided I will then need the following for stage 2
Self Build Documents Required
Application Form Completed.
Terms of Business Signed.
Fee agreement signed
I will need to certify your original documents, therefore, I will need to see the originals. via what's app or skype
ID Passports / Driving Licences/ Utility Bills less than 3 months old.
3 Months Bank statements for each individual, lenders wont accept screen shots must have name address and bank logo on each statement
Please bear in mind that your income will need to be verified and the lender will only consider what has been declared to the Tax man .
3 Months Pay Slips & P60 if Employed. minimum employment 3 months and be outside the probation peroid.
Self Employed SA302S Accounts for a minimum of 2 years. Tax arrangements
Directors Ltd 3 years accounts all companies if you own more than 25% of the company shares, Treated as Self Employed.
Six Months Business Bank Statements Self Employed and Ltd
We will also need a full credit report for each individual Experian or checkmyfile etc
Copy of Planning Permission or outline planning.
Copy of Plans / Drawings
Costings For the Project (Deposit + Loan = Costing of Project).
Project Timeline What stages funds will be required.
SAP REPORT. If using The Ecology Building Society.
Confirmation of Deposit either bank statement or confirmation if you own the land/ site, land registry.
Architects Details.
Builders Details
10 YEAR Structural Warranty or Architects Cert (dependent on lender).
Site Insurance .
Covid Form "We provide "
Interest Only Declaration " We provide".
If you are agreeable
I look forward to working with you over the next few months.
Regards
James Blair 07973 335 793
Self Build Questionaire click here
There is 27 different pieces of information required by the lender to get you a Self Build Mortgage offer which means " here is the offer and here are your funds". This can be a pain but if the lenders dont receive all the info they ask for, they throw your application under the desk and move on to the next application.
Your home will be at risk if you don't keep up your mortgage payments
www.jamesblairandco.net
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