Self-build mortgages are gaining popularity recently due to the fact that these mortgages are offered according to specifications detailed in the building and construction plan. They are also in much demand nowadays. This article throws light on some of the most important factors associated with self-build mortgages.
Self-build mortgages: Introduction
Self-build mortgages differ from regular mortgages in the fashion in which they are offered. In fact, self-build mortgages are offered for self-building properties such as self-building houses. So, these are offered in installments and according to the needs of the building and construction plan. It is obvious that these mortgages will require more details than in the case of regular mortgages. There are different stages of the self-building process and the money is offered according to the needs in different stages. However, there are some similarities too. In the case of self-building mortgages where you buy your own land plots, the money is offered as percentages of the total cost which you need to build your own house. The mortgages often cover 75% of your money-raising needs but some parties may also offer up to 80%.
The process and stages
In the self-build mortgage process, designing your own home is left to you. You can design your own home and ask for money according to the stages of the process of building your house. The cost of building the house is a factor that you take into consideration but the finance project also looks at all the details. As self-build homes are often constructed after buying land plots, therefore the preliminary stage of the process involves the purchase of plots. Hence, you may find that money is offered for buying plots too. The following are the exact stages of a self-build house and thereby apply to self-build mortgages. Stage 1: Land purchase Stage 2: Laying foundations Stage 3: Build to Wallplate Stage 4: Wind and watertight Stage 5: Plastered Stage 6: Completion
There are some mandatory requirements that need to be met in order to get a self-build mortgage approved in particular cases, including self-build mortgages in the UK. These may vary with different lenders but the following are applicable almost everywhere. 1. Planning permission. 2. Building regulation approval. 3. Builder details and their qualifications. 4. Insurance documents, including land insurance. 5. Specification and plans. 6. A complete set of build costs. 7. Proof of your registration with a warranty scheme. 8. Other supporting information for self build insurance . Once these specifications are submitted, the lenders can start the process of offering mortgage to individual applicants. The process is usually more smooth if you have a sound credit record, which in many cases, is also a requirement for mortgages.