Mortgage for Self-Build

Shoe Lover

Hi,

I'm looking to build a house with OH and am looking for advice on a mortgage. Who to go to, what do we need etc. I have tried looking on the banks websites but to be honest, it's all gobblegook to me I don't see any of the banks saying anything about Self-Build Mortgages. The only site with any sign of them was EBS. We don't need money to buy the site as OH's parents are giving it to us.
We are currently renting but are moving home to the parents at the end of July so that we can start saving.

If anyone has any advice, it would be much appreciated.

Many thanks!

Frank Black

Well,
You'll need to get your planning permission sorted first.
When your architect has drawn up your plans and your permission has been approved you will need to get an estimate on the build cost. At that stage you will have a much better idea of how much you need to borrow and you will be able to discuss with various banks
.

Shoe Lover

Thanks Francis. I'm just trying to find out as much as I can now about the process so that I'm prepared for it. I have a tendency to panic over these sort of things and get overwhelmed so I'm trying to do as much learning as possible.

racso1975

With self builds it's a case of knocking on the banks doors. And stear clear of the dublin and city banks as they aint got a clue how self build and stage payments work.

GavMan

racso1975 wrote: »

With self builds it's a case of knocking on the banks doors. And stear clear of the dublin and city banks as they aint got a clue how self build and stage payments work.

Pardon my ignorance but aren't banks nationwide, these days?

Or do you mean a rural branch?

oldyouth

GavMan wrote: »

Pardon my ignorance but aren't banks nationwide, these days?

Or do you mean a rural branch?

I think what racso1975 means is that the staff member that you talk to would be more familiar with self build in a rural branch than in a Dublin/City branch of the same bank.

unclebill98

It's irrelevant. Any bank branch will know the same thing.

A self build application is no different to any other mortgage. Its just drawn down differently. Every bank will have different criteria for a self build, as in loan to value, so Shop around.

bailes

Nationwide/rural/urban................ all irrelevant.

The OP wants to know where to start. Black Frances has given you a good starting point.

I would also suggest that you need to get some idea of what you are going to need to borrow so when you have a look at the square footage of the prospective build use a ratio of €100 per sq ft. to build e.g. a 2500 sq ft house would be a €250k requirment.

One of the most important factors the bank consider when underwriting an application is the clients ability to repay along with evidential historical proof of this, if you need a €250k mortagge you need to show historically by way of savings that you can do it not only at the quoted rates but at stress tested rates.

You may also need 10% of the build cost saved for over runs, are you going fixed price contract or direct labour?

So you can as previously suggested go knocking on doors and probably make a mess of it or you can retain a good broker, that not only will explain all but will give you the best chance of getting the money you need.

If you are in Dublin or commuter belt let me know and i will point you in the right direction.

Best Of Luck

Shoe Lover

bailes wrote: »

Nationwide/rural/urban................ all irrelevant.

The OP wants to know where to start. Black Frances has given you a good starting point.

I would also suggest that you need to get some idea of what you are going to need to borrow so when you have a look at the square footage of the prospective build use a ratio of €100 per sq ft. to build e.g. a 2500 sq ft house would be a €250k requirment.

One of the most important factors the bank consider when underwriting an application is the clients ability to repay along with evidential historical proof of this, if you need a €250k mortagge you need to show historically by way of savings that you can do it not only at the quoted rates but at stress tested rates.

You may also need 10% of the build cost saved for over runs, are you going fixed price contract or direct labour?

So you can as previously suggested go knocking on doors and probably make a mess of it or you can retain a good broker, that not only will explain all but will give you the best chance of getting the money you need.

If you are in Dublin or commuter belt let me know and i will point you in the right direction.

Best Of Luck

Thanks Bailes - I'm in Louth so if you could give any advice, it would be much appreciated!

bailes

ok so if you need to get the ball rolling on this and assuming you have started talking to architects etc. P.M. me and i will point you in the right direction.


Best of Luck

brendan_donegal

Be careful what you disclose you have. I had a substantial figure in my account and when I went to apply they put a condition that I had to spend all my money first, new condition being brought in to all self build mortgages, supposedly..!! Also never disclose gifts just say the money is yours, just causing more hassle. I had to move to another bank in order to keep control of my own money. And finally they keep the last 10% to ensure the property gets finished, then they release it. Better to ask for 10% more to ensure you don't need it.
They seem to be going from one extreme to another.

Good luck, you'll need it.