Selfbuild Mortgage drawdown question

Cork selfbuild

We are currently half way through our selfbuild, we have a mortgage with AIB, all is going fine, no issues with it.

My question is, what happens if I do not drawdown the full amount? Not talking a huge amount, say not taking the last 20-30k around 10% plus or minus a bit! I know the last 10% isn't paid until completion and final valuation anyway, will they try to penalise me?

Half is fixed and half variable to allow for a over paying on the principle if we can afford it every now and again, do I need to complete it and just pay a lump off the principle they have just given me or just not draw it down? Or once I get my second last payment, send in a completion and valuation cert and say thanks?

Any advice here is appreciated on best approach.

Nervous Wreck

Nothing happens if you don't draw down the full amount. You don't pay interest on it (obviously) and there's no penalty. SOP is for the bank to make the funds unavailable to you if you don't draw down by a certain time anyway because, if you've drawn down 90% of your mortgage and have monthly repayments of say €500 and they continue to make those funds available to you indefinitely over the course of the mortgage, you could draw it down with a year to go on the term of your mortgage and suddenly your payments would skyrocket. So nothing to worry about if you end up not using the funds.

Cork selfbuild

Thanks for that, just was conscious of doing it properly and there was no clause I missed in the pages and pages of T&C's!

In relation for valuation certs of completion etc, should I just send in when complete to close it off, I presume they will want something if we don't take last stage and just pay away each month? As we have a rate linked to LTV < 70%.

Nervous Wreck

I'll let someone more knowledgeable answer that part!

mickman

Cork selfbuild wrote: »

Thanks for that, just was conscious of doing it properly and there was no clause I missed in the pages and pages of T&C's!

In relation for valuation certs of completion etc, should I just send in when complete to close it off, I presume they will want something if we don't take last stage and just pay away each month? As we have a rate linked to LTV < 70%.

Just call and ask them

I have a question for you . How was yoir ltv calculated ? Was it on builders quote relative to amount of mortgafe or did valuers have input

Cork selfbuild

It was based off valuation from their appointed agent vs mortgage and completion costs based...

mickman

Cork selfbuild wrote: »

It was based off valuation from their appointed agent vs mortgage and completion costs based...

Thanks. And how did that valuation from their guy stack up against the costs ?

I'm only asking as recent a bank valuer only included 50% of our building costs as extra value to the house shell. I find this unfair as I thought it would be more like 80%

Cork selfbuild

Costs was built from engineers reports and different tendering info...

As to build vs finished value, it's more around your 75% from memory

Trish56

Cork selfbuild wrote: »

We are currently half way through our selfbuild, we have a mortgage with AIB, all is going fine, no issues with it.

My question is, what happens if I do not drawdown the full amount? Not talking a huge amount, say not taking the last 20-30k around 10% plus or minus a bit! I know the last 10% isn't paid until completion and final valuation anyway, will they try to penalise me?

Half is fixed and half variable to allow for a over paying on the principle if we can afford it every now and again, do I need to complete it and just pay a lump off the principle they have just given me or just not draw it down? Or once I get my second last payment, send in a completion and valuation cert and say thanks?

Any advice here is appreciated on best approach.

That is no problem whatsoever not to draw down the full amount. When the property is completed you will need to submit a letter to the lender advising that the property is completed and that you do not need the remaining 20k or whatever is o/s. Your Supervising Architect will have to submit a Certificate of Compliance and you need to arrange a final valuation and change your Home Insurance to Comprehensive cover and AIB's interest noted on the policy and ask for a Letter of Indemnity. All these should be sent to AIB in order to complete your mortgage.

Trish

Cork selfbuild

Thanks very much Trish, very clear.

mickman

Guys

What kind of house insurance do you need during the build ?

Cork selfbuild

I had to get in the course of construction insurance - Bank said the value it needed to be, cost was 0.1% of value, found it hard to get though, a lot of places said no!

mickman

Cork selfbuild wrote: »

I had to get in the course of construction insurance - Bank said the value it needed to be, cost was 0.1% of value, found it hard to get though, a lot of places said no!

can you PM me with the name of hte place where you got it please ?