Mortgage on a site only

selfbuildkk

Hi firstly I hope Im posting in the right section, mods feel free to move. What I am wondering is whats the story when you want to borrow money just to buy some land. At this point in time im searching for land to build a house, with site being so expensive (am looking for a min of three acres in south kk as keep our own horses) I was hoping to buy the land now and build later. I was told by a few people that it would end up being a personal loan at a very high rate and have googled for info but found nothing.

Not in any rush to build as living quite comfortably in tied accommodation with work and would like to save as much as possibly reducing the eventual amount needed to build and mortgage overall. its quite difficult to rent land down here and youre always wary of it not being your own land to do with as you wish, any advice or info is greatly appreciated.thanks

mr_edge_to_you

From what I could gather in my research over the last few months some banks will lend 60 to 80 percent of the site value so you still need a fairly hefty deposit to take out a mortgage on a site and then maybe 70% of the build. It is very much a case by case issue.

Sorry if I'm stating the obvious here but if you burden yourself with huge debt for a site you won't be able to borrow a mortgage to build.

Unfortunately the banks have you by the twig and giggleberries.

If you can get the site paid then you are in position to borrow 100% of the building costs for the house provided that the building cost is less than 80% of the estimated value of the finished property upon completion.

Best thing to do is go and chat to someone in the local branch of your bank. They'll put the figures together very quickly!!

selfbuildkk

would have quite a substantial amount saved, well for me it is anyway, about 60k, my real issue is what rate i will be subjected to paying on a "loan" for a site only. we are both in well paid stable jobs, no rent mortgage to be paid and no personal loans so saving a lot of our earnings which means the longer it takes the more we will have saved but its coming to a stage now where we would like to have a long term plan in place and begin to get organised, at least have a foot on the ladder sitewise.

I undersatnd as well the implications of having a personal loan when tryin to get a mortgage but we would be planning to be mortagage free as such again by the time we go to build, basically have the site paid for by the time we want to build on the site, again thaks for all the info and help

mr_edge_to_you

Go straight to the bank so. You are in as strong a position as anyone can be with the banks with a savings record like that!

selfbuildkk

thats what was hoping for but all i keep hearing is, when youre going to buy a site its a personal loan with higher rates as opposed to a mortgage rate.why i dont know as its house prices that are dropping, not necessarily land, especially here in kk, so what is the banks reasoning for not offering a decent rate on land only?

Poor Uncle Tom

Something to keep in mind.

If a piece of land does not have the benefit of planning permission it cannot be classed as a 'site' in building terms, merely agricultural land. You say 3 acres - this amount of land with planning permission in south kk could be worth about €180,000, without planning permission, possibly €45,000.

Also if the land is not zoned for development you have the added burden of proving a genuine local housing need before the chance of getting planning permission.

sydthebeat

Poor Uncle Tom wrote: »

Something to keep in mind.

If a piece of land does not have the benefit of planning permission it cannot be classed as a 'site' in building terms, merely agricultural land. You say 3 acres - this amount of land with planning permission in south kk could be worth about €180,000, without planning permission, possibly €45,000.

Also if the land is not zoned for development you have the added burden of proving a genuine local housing need before the chance of getting planning permission.

i would agree completely with uncle tom here...

if you are purchasing this simply to keep horse then only pay agricultural acre rates..... no problems.... rates currently 15-20K for good arable land... 11-15K for bad land...

although the farmer may not be willing to let this land go as 'agricultural' and may want development rates...

if you are planning on building on the land, and willing to pay development rates (circa 100-150K, or above, for that area of land), then you are taking a big risk if not buying 'subject to planning'...

as PUT says, you will need to comply with local needs requirements, and KK are very strict on this.....

selfbuildkk

Hi guys, thanks for thereplies. I am aware of the different rates of land,be they agricultural or for development purpose. Ideally looking for land that we could eventually build on. Also aware that any farmer with land with road frontage is going to look for a higher price due to the possibilty of building on it. So the plan is find somewhere with 1/2 acre site with the rest of the land behind it. so thinking roughly 80k for the site and another 3 acres or so behind with no development potential so agri price of 10-15k. I hope this makes sense.

On the local needs issue, weve had planning meeting before on a previous site and these were met, so no issue on that front. Back to my original question then of how to buy such land without paying a personal loan rate? can a mortgage be got for site only?

clint_eastman

I've recently bought a site with planning and had intended on just getting a mortgage for the site only as i'm not ready to build, only to be told by the bank that this could only be done at a personal loan rate i.e. not a mortgage. I had to get approved for the full mortgage amount (site plus future house), i'll only be drawing down the site part of the mortgage until i start building. However, to get the mortagage for the full amount i needed to get the house priced up and submit the potential house value and spec, which obviously you can't do (if i understand correctly). Outside of this, AFAIK you cannot get a mortgage for a site alone.

Might be better to look for an old farm building with a couple of acres thrown in.

Then investigate the possibility of replacing the old farmhouse with what you want to build.