Self Build Mortgage - Will A Lender Really Give A Mortgage To Build A Home?

With some many programmes on the television looking at people building their dream homes the demand for building plots has never been greater. If you are the type of person who likes hard work and relishes a challenge then a self build could be the answer to your housing needs. If you choose to look into a self build mortgage there are things that you need to know, firstly very few people actually build the house themselves, instead they get a project manager to manage the build and merely oversee the project themselves. You should also pay attention to the timescale of building your own home, as it needs to be done in stages and all tradesmen need to be co-ordinated so that each stage is completed on time. However despite all this a self build mortgage could be a way to get the house of your dreams at a fraction of the cost.

There are two main kinds of self build mortgage - staged-payment self build mortgages which work by the lender releasing funds when building work had reached a certain stage before progressing to the next. These mortgages needed a lot of cash from the borrower to begin the project. The other kind of self build mortgage is an accelerator self build mortgage where the borrower can borrow up to 95% of the land and construction costs at the start of the project.

Pros and cons of a self build mortgage?
Once you have you piece of land to build on have a project manager or architect on board you can begin to build your house. Here are the pros and cons of a self build mortgage -

Pros -
Once built a self build house is usually worth 30% more than it cost to build. Money is released in stages so that each part of construction can move forward. Up to 95% of construction costs, land costs and the final value of your home can be borrowed. You can stay in your home until your new one is built. Interest rates are still competitive.

Cons -
A self build can take some time and can be frustrating so you need to have patience. You need to get tradesmen you can trust or your timescale could be way out. Many self build projects run over budget, so it is important to have a contingency fund over 15% of the expected build costs.

Self build mortgage advice
If you would like more information on a self build mortgages you can visit one of the many online mortgage comparison websites or speak to a fee free mortgage advisor who can help you with any aspect of getting a self build mortgage.