What is a Self-build mortgage?

This type of mortgage enables borrowers to purchase land and build a house themselves or hire a builder to do it for them with a loan secured on that property, provided it is used as a residence by the borrower.

Once the lender has agreed to the loan, it is released in stages to the borrower as the building develops.

The usual objective of the borrower is to generate equity more quickly from building the residence themselves, and to obtain long-term capital growth on the investment.

Are there differences between a Self-build and a Standard mortgage?

The main difference is that the lenders will release funds in stages for a Self-build mortgage, rather than as a single payment for a standard mortgage.

Is a Self-build mortgage a safe investment?

Whilst there are many risks associated with Self-build, it can provide a reasonable return on investment in times and locations where the demand for residential property is high and property prices continue to climb.

However, Self-build mortgages require good building and project management skills as well as a working knowledge of current building regulations to avoid the potential risks and pitfalls. The lender will require a final inspection by a suitably qualified person to ensure that the work is completed to a satisfactory and recognised standard.

What should I do if I want a Self-build mortgage?

The first and most important step after you have decided you want a Self-build mortgage is to have a discussion with us to provide you with independent financial advice.

Once we have agreed what the most suitable Self-build mortgage is for your particular circumstances we make an application on your behalf to take out a loan based on how much you can afford the value of the property, the projected build costs, and length of time agreed between you and the lender.

Want to know more?

Talk to one of our qualified financial advisers on 01553 777600 or e-mail us at enquiries@ringassociates.co.uk

You may want to read the free download publications from the National House- Building Council of various titles under ‘Information for self-builders’ by accessing the following website www.nhbc.co.uk/NHBCpublications/Publicationdownload

Also read the free government agency advice from Directgov under the title ‘Raising the money to build your own home’ at their website www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/BuildingYourOwnHome