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Mortgage for site to build

help_me1 · 2011-11-21 19:06:33

Hi our bank is telling us that we have to use all our savings(80k) to buy the site that we have gotten planning permission on. They said that they won't give us any money for the purchase of the site and our first draw down will be after the foundations. Is this the norm? We were hoping to use some savings and to draw down…

21-11-2011 7:06pm

#1

help_me1

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Hi our bank is telling us that we have to use all our savings(80k) to buy the site that we have gotten planning permission on. They said that they won't give us any money for the purchase of the site and our first draw down will be after the foundations. Is this the norm? We were hoping to use some savings and to draw down some money for the site so that we could avail of the mortgage interest relief at the higher rate before January the 1st.Also we are a bit worried that if we use all our money and the bank change their minds to give us a mortgage that we will have no deposit left for anything. They have approved us but they keep looking for more and more material.

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#2 21-11-2011 9:53pm

muffler

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Moved from Construction & Planning to Banking & Insurance & Pensions

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#3 22-11-2011 12:08am

stepbar

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help_me1 wrote: »

Hi our bank is telling us that we have to use all our savings(80k) to buy the site that we have gotten planning permission on. They said that they won't give us any money for the purchase of the site and our first draw down will be after the foundations. Is this the norm? We were hoping to use some savings and to draw down some money for the site so that we could avail of the mortgage interest relief at the higher rate before January the 1st.Also we are a bit worried that if we use all our money and the bank change their minds to give us a mortgage that we will have no deposit left for anything. They have approved us but they keep looking for more and more material.

It's not really the norm, but I suspect that the bank believes that the house, upon completion, will not meet the max Loan to Value that they are willing to provide. I would suggest that you ask the bank to provide you with a list of valuers to whom they deal with and have a few valuers provide a written valuation. You would also need to know what is the max Loan to Value that they are willing to provide. Self build mortgages can be dodgy - you are really at the mercy of a falling property market. You most defiantly need to have lots of cash available incase the LTV deteriorates over the course of the build.

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#4 22-11-2011 12:40pm

muffler

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Have a read also at the good advice offered here

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