Mortgage for Site Only?

2rkehij30qtza5

Generally speaking, does anyone know if banks give out mortgages for sites?
We would have around 50% of the price of a site saved. We would like to get a 50% mortgage for a site only, buy the site and in a few years we would have another bit saved and could get a 'top-up' mortgage to build the house.
There is a particular site for sale that we have had our eye on for years...it was never for sale before and now it is and we would love to buy it before it's snapped up by someone else. Unfortunately we wouldn't have the means to get a 'full' mortgage for site and house build at this minute.
Thanks

Mike Tobacco

While I don't know specifically about sites, I would say that a bank's primary concerns when assessing a loan application for any purpose are:
a) your ability to repay the loan
b) the security offered in the event that you cannot repay.

These two items govern how much a bank will be willing to lend, if they are willing to lend at all.

If you are renting at the moment, and you have still managed to save 50% of the purchase price over the last few years, then a) shouldn't be an issue. That said, I am wondering as to why you don't have the means for mortgage approval for a build if you are saving at a good rate (unless the site is extremely cheap)?

As for b), some banks are lending upwards of 90% of the independently assessed value of completed properties. I would imagine 50% LTV would be reasonable for a site (although they may not be willing to go much higher!)

Your best bet IMO is to speak to your current bank where you have been saving regularly. If anyone will approve you it is probably them. You could look into funding the purchase and build with them as a first option (if you haven't already) as you may be pleasantly surprised. If they won't lend to you even just for the site then you're probably out of luck, but you can always try a mortgage broker.

um7y1h83ge06nx

Another thing is that the minimum banks (well Ulster Bank as recently as a 2/3 weeks ago at least) lend in a mortgage is €40k.

2rkehij30qtza5

Thanks to both of you. The site is pretty expensive..it would be €100k.
We wouldn't be able at the moment to get a mortgage of anymore than €50k due to a negative equity property that we own and rent out. So until that comes good again we are limited in the amount that we can borrow. I know we can borrow €50k but I wasn't sure if the banks would allow that on a site. Then in the future give us a top-up on the mortgage for the cost of the build (once we offload the neg equity property and have the ability to borrow more).

Victor

If you have a negative equity property, it may be difficult to get a second mortgage - the banks would prefer you to reduce your negative equity.