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Self build mortgage

  • 13-01-2017 1:48am
    #1
    Nickypicky
    Registered Users, Registered Users 2 Posts: 72 ✭✭


    Hi 👋ðŸ¼
    I am hoping to start a new build soon. I am going with a well known building company who take over the whole project from start to finish and have given me a price for the project. When talking to the bank re: mortgage they asked if they had included a 10% contingency. Building company told me they hadn't as there price is a fixed price ?? Has anyone else come across this ? Do all banks require a 10% contingency with a self build ?


Comments

  • #2
    BryanF
    Moderators, Home & Garden Moderators Posts: 10,146 Mod ✭✭✭✭BryanF


    You keep the contingency separate to the builders price

    Do you have separate support from arch / Eng / Qs?


  • #3
    kkelliher
    Registered Users, Registered Users 2 Posts: 1,583 ✭✭✭kkelliher


    Nickypicky wrote: »
    Hi 👋ðŸ¼
    I am hoping to start a new build soon. I am going with a well known building company who take over the whole project from start to finish and have given me a price for the project. When talking to the bank re: mortgage they asked if they had included a 10% contingency. Building company told me they hadn't as there price is a fixed price ?? Has anyone else come across this ? Do all banks require a 10% contingency with a self build ?

    Oh the banks the banks....... This pops up regularly and leaves me pulling my hair out every time. I cannot understand how or why a bank believes it is a good idea to have a contingency built into a contract as in theory this just tells a builder that the client has another pot of money available that he can spend.......Always show your contingency as a simple add on to the building contract and do not put it in the building contract.


  • #4
    Begs
    Registered Users, Registered Users 2 Posts: 120 ✭✭Begs


    Nickypicky wrote: »
    Hi 👋ðŸ¼
    I am hoping to start a new build soon. I am going with a well known building company who take over the whole project from start to finish and have given me a price for the project. When talking to the bank re: mortgage they asked if they had included a 10% contingency. Building company told me they hadn't as there price is a fixed price ?? Has anyone else come across this ? Do all banks require a 10% contingency with a self build ?

    Both AIB and BOI require it.


  • #5
    Nickypicky
    Registered Users, Registered Users 2 Posts: 72 ✭✭Nickypicky


    BryanF wrote: »
    You keep the contingency separate to the builders price

    Do you have separate support from arch / Eng / Qs?

    No this is all included


  • #6
    Gumbo
    Moderators, Society & Culture Moderators Posts: 40,800 Mod ✭✭✭✭Gumbo


    Nickypicky wrote: »
    Hi 👋ðŸ¼
    I am hoping to start a new build soon. I am going with a well known building company who take over the whole project from start to finish and have given me a price for the project. When talking to the bank re: mortgage they asked if they had included a 10% contingency. Building company told me they hadn't as there price is a fixed price ?? Has anyone else come across this ? Do all banks require a 10% contingency with a self build ?

    Yes, UB are the same. Even for domestic extensions they want 10-15% contingency. You have to have this separate to the money the bank give you and separate to the portion you are using to part fund the build.


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  • #7
    Gumbo
    Moderators, Society & Culture Moderators Posts: 40,800 Mod ✭✭✭✭Gumbo


    Nickypicky wrote: »
    No this is all included

    I know who you are using, they charge a pretty sum for this service. I presume they take you through the planning also.


  • #8
    Nickypicky
    Registered Users, Registered Users 2 Posts: 72 ✭✭Nickypicky


    kceire wrote: »
    Nickypicky wrote: »
    No this is all included

    I know who you are using, they charge a pretty sum for this service. I presume they take you through the planning also.

    Yes they did !


  • #9
    Sligoboy21
    Registered Users, Registered Users 2 Posts: 43 ✭Sligoboy21


    When they say 10 % contingency plan do they mean you have to draw down an extra 10% on top of the mortgage you require or you must have the 10% savings yourself. Sorry for off topic but I'm also will be doing self build in coming months.


  • #10
    Gumbo
    Moderators, Society & Culture Moderators Posts: 40,800 Mod ✭✭✭✭Gumbo


    Sligoboy21 wrote: »
    When they say 10 % contingency plan do they mean you have to draw down an extra 10% on top of the mortgage you require or you must have the 10% savings yourself. Sorry for off topic but I'm also will be doing self build in coming months.

    You have to have a portion of the savings to supplement the draw down (10% or 20% depending on bank minimums) then you have to have the contingency separate in savings or if the total values can be built into the loan offer.

    Each bank does it differently so. Best to discuss with your individual bank.


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