Self Build Mortgage Advice?

ELBAOS

Hi
Just looking for some advice just spoke to a mortgage broker about a self build mortgage. They said that our house plans are too big as the banks do this €85x sqf calculation. We have full planning got so he said we would have to reapply to get size changed but we could build the bigger size after if we want as we have family builders and can do the house for less than €85 per sq ft. But it killing us to think we have to reapply to ask can we build smaller but be allowed extend to our original size just to keep in with banks figures. hope this makes sense! Our architect who knows we have family members to do most of work said we could do house for 170000, Broker said we would get approved for 135000 based on earnings have 20000 savings and can get gifted the balance of 15000 (already gifted site worth 40000) but our problem is the broker said is banks calculations will say house should cost 240000 to build so therefore wont lend!! oh we also had said the 2 rooms broker said to lose in new plans we had said we would do them as we were going along not finish out fully until we gathered more money but again he said banks will not go with that it all has to be finished exactly?
Any Advice?
Thanks in advance

JimmyMW

ELBAOS wrote: »

Hi
Just looking for some advice just spoke to a mortgage broker about a self build mortgage. They said that our house plans are too big as the banks do this €85x sqf calculation. We have full planning got so he said we would have to reapply to get size changed but we could build the bigger size after if we want as we have family builders and can do the house for less than €85 per sq ft. But it killing us to think we have to reapply to ask can we build smaller but be allowed extend to our original size just to keep in with banks figures. hope this makes sense! Our architect who knows we have family members to do most of work said we could do house for 170000, Broker said we would get approved for 135000 based on earnings have 20000 savings and can get gifted the balance of 15000 (already gifted site worth 40000) but our problem is the broker said is banks calculations will say house should cost 240000 to build so therefore wont lend!! oh we also had said the 2 rooms broker said to lose in new plans we had said we would do them as we were going along not finish out fully until we gathered more money but again he said banks will not go with that it all has to be finished exactly?
Any Advice?
Thanks in advance

Firstly imo unless your family are going to work foc you have no hope of finishing anything for €85/ft2 however I wont start questioning your costings that is up to you.

You are suggesting to get mortgage approved for a smaller house and build the bigger house you have already received planning for. you have a number of problems there.

You must submit your planning application & approval documents to the bank as part of the mortgage application. You must also submit a commencement notice to the local authority based on the planning approved. So if you submit the smaller house in the commencement notice you will be in breach of planning, building the bigger property, therefore serious problems with the local authority. Also you will need an chartered Eng/QS/Arch to sign off the stage payments, and part of which is certifying that everything in being built in accordance with planning which it clearly would not be, hence I think you would find it impossible to get someone to sign such a cert.

So if you submit the bigger house in the commencement notice you will have the same problem as above with the stage payment certs.

Your costings are not being accepted for a reason, they are completely unrealistic, you need to cut your cloth to measure.

ELBAOS

Hi Thanks for reply, they said to reapply for the smaller house but to include the option of extending to the original size in the planning?! does this even exist? he said to do the foundations lentils etc for the full house but to not build them for a few years!Cover them with grass!!! to me that just a needless roundabout. My family feel it would be easier to build them but just not finish them inside yet. Yes Family (registered contractors) will be doing the work so just materials will be the cost and the spec with be normal nothing extravagant.

JimmyMW

ELBAOS wrote: »

Hi Thanks for reply, they said to reapply for the smaller house but to include the option of extending to the original size in the planning?! does this even exist? he said to do the foundations lentils etc for the full house but to not build them for a few years!Cover them with grass!!! to me that just a needless roundabout. My family feel it would be easier to build them but just not finish them inside yet. Yes Family (registered contractors) will be doing the work so just materials will be the cost and the spec with be normal nothing extravagant.

If they are registered contractors and are willing to do the work for free as you have stated get them to give you a fixed priced contract for the bigger house and just go to the bank with that, if you get the bank on board you should be able to get an Eng to sign off on the stage payments outlined in the fixed priced contract form the builder to the client.

893bet

1) by your figures you are building a circa 2800 sqft house. That is big lump! I am building 2200 and it feels huge. Think about reducing and consider the cost saved for the build....then the long term saving....less heating....less maintenance....less cleaning! My build cost will be circa 220k. So you think you can build for 50k less but 25%bigger? I had a lot of cheap labour and did a share myself! You are not gonna build your house for 170k. You will build a house for that but it won't meet any building regs and will be poor poor finish.

2) labour makes up approx 30% of the build cost. Materials are higher than ever and going up every month. As an example my second fix carpentry materials were 8.5k (doors, floors, skirt and window boards). Labour was 2.5k and took 1 carpenter 3 weeks. Do you really think your family are gonna work for free? It's not Going to happen.

3) are your family capable of meeting part L? And F? Do they know about Airtightness? Etc? Meeting building regs is expensive and can be complicated. If your don't you will have a substandard house that you can't heat and will be posting here in 5 years asking for advice as your yearly oil bill breaks you.

phormium

I see the bank's point of view here, they will have had countless self build mortgages where the house ran over budget and there may have been no scope for extra borrowing based on income by the borrower. That's a problem then.

Self builds go over budget, I was a mortgage adviser for years and once and only once in that time did I see a self build come in on budget and oddly enough that was a guy living in the UK who hired a retired engineer to project manage the lot, I know because I asked him how on earth did he do it within budget. Some ended up with one, two and even three top ups to the mortgage to get it finished. That's all fine if there is sufficient income to allow extra borrowing but if there's not then the bank has an unfinished house which doesn't make for good security for a loan.

It's a few years now since I dealt with this so I don't know current building costs etc but as one poster said materials cost an awful lot, the free labour is nice but only saves so much and realistically are they going to be working for you free during the working week or are you going to be limited to the house being worked on in their off time, evenings and weekends.


In my experience the greatest culprits for going over budget were actually the houses where every relative was some sort of tradesperson and was going to do the work cheap.

Revisit your costings and make sure you can build for what you think you can.

anoble66

Bear in mind that the banks figure of 85e sq/ft is already on the low side. You might build a shell of a house for that figure but in reality they want a house finished to completion. I got a very good price from my contractor to build my place at approx 78e sq/ft. But once I add on engineers fees, council fees, connection fees, kitchen, floorings, bathrooms, stoves etc it will be coming in well over 100e sq/ft. in my case the bank also looked for 10% contingency to be in place as well.

Honestly even if the bank is willing to work with you on the figures to get it past the underwriters etc, I can't see you being able to build that size of house for 170k to what the bank consider completion.

SelfBuilding

go talk to the bank, they'll let you know pretty quickly what they'll approve and what they won't. Also talk to more than one bank, they all appear to have there own set of rules and most of that is about ticking boxes not about you or your circumstances.

ELBAOS

Thanks for all your replies.
We knew first day we would only have about 170k to start and knew we wouldnt get it all finished for that we had planned to just move in downstairs and be doing it away over time which I thought was up to us,(lots of friends did this and its worked out)(our architect also said we would get in for this) but we are just caught now with the banks requesting it to be completed. Which I understand due to all the incomplete houses just not liking why we are being caught by this! do people know is this the criteria for all banks? has any1 being allowed to be working away at their house?I am meeting with my architect/engineer to help with getting the costings etc re building regs. to take to bank. Thanks

kkelliher

ELBAOS wrote: »

I am meeting with my architect/engineer to help with getting the costings etc re building regs. to take to bank. Thanks

Given the off the wall comments (IMO) on costs noted so far here, I would strongly advise you get a local QS to sit in on that meeting as the true reality is along way from where your figures currently sit for a finished house.

Monfreid

Hi,
my house is 2100 sqf. I initially thought it was going to cost 100 eur/sqf but it looks like it's gonna be between 120/140 .. Still looking for a few quotes. Price are going up quickly, builders are getting busy so harder to find a good one available.
The bank has a recommended price per sqf, if you go below that, you will have to explain why (family members doing the work, ...) as they want to be sure that you're not building a house that is poorly finished.

chillit

Monfreid wrote: »

Hi,
my house is 2100 sqf. I initially thought it was going to cost 100 eur/sqf but it looks like it's gonna be between 120/140 .. Still looking for a few quotes. Price are going up quickly, builders are getting busy so harder to find a good one available.
The bank has a recommended price per sqf, if you go below that, you will have to explain why (family members doing the work, ...) as they want to be sure that you're not building a house that is poorly finished.

what are you including in your 120/140 eur/sqft estimate.

It would be great to see a detail bill of quantities or quote for a current job.

Monfreid

chillit wrote: »

what are you including in your 120/140 eur/sqft estimate.

It would be great to see a detail bill of quantities or quote for a current job.

My current quote is 123 eur / sqf inc. VAT, builder finish (no kitchen, no tiles, no wooden floors, no sanitareware, ... I will do all that myself)

it includes elevating of the site to road level, fences, stone filled driveway, plastered block walls to entrance, manmade slates

the house is 1 and 1/2 storey

AWHP + UFH downstairs + rads upstairs + 2 PV + 1 multifuel stove + MHRV
House should be A3 and air tightness 2