Self-build advice

clueless new build

Hi all,

I am looking for some guidance here as to next steps to take.

We have received planning permission and have transferred the folio into our names.

We have saved more than 20% (second time buyers, first time self-build) of the money required. We are aiming to begin our self-build in Spring 2018. We were planning on begininng with our savings which will get us as far as built, roofed and windows in...however I have been hearing that it is difficult/sometimes impossible to get a bank to lend at that stage as they want to be involved from the beginning or not at all, has anyone any knowledge of this?

We are receiving TRS on our current mortgage until 2020 (yes, we bought in the boom 🙈), will we lose the TRS on our current mortgage if we take out a second? We will be renting out our current property when the self build is finished as it is in a lot of negative equity so we will not look to sell just yet.

Also, I am aware we need to do the following prior to starting but is there more that we are unaware of?
-Go back to the engineer/architect and get construction drawings?
-Consult a BER expert
-Pay charge as per planning permission to the council and submit commencement notice

ANY advise that people can give will be very much appreciated.

Calahonda52

OP: if you are in NE on existing, the FIRST thing you need to get sorted is the money.
I don't want to seem blunt or harsh here but as I do finance for a living, and have done numerous restructures during the crash, based on what I have seen, and reading your plan:
you very plainly run the risk of losing everything if this goes pear shaped.
For example, what long term illness insurance have you got?
What happens if you/your partner get sick/fired/or even pass away?

I doubt if you will get more debt with existing NE if the number is big.

In closing, I would preserve my cash for as long as possible: we don't say it is king for no reason.

Good luck and keep well

mike_2009

Hi,
I can't see how you'll get weather tight on just 20% of the total cost. That would get you started, deposits paid but where's the balance going to come from? You've still got connection charges for ESB/Water/Gas, build insurance, structural warranty and no extra income until you can move over and rent out your old property?
I'd look at buying/renting a mobile home so you can at least move out and get rental income and build as you can afford but you could end up in that temporary accommodation for years!
You could also get a shock during groundworks (something unexpected uncovered) you'll have to have a contingency put away to deal with it.
Great advice from Calahonda52, look at income protection, serious illness cover as each of you is a risk in this approach as it's likely to be an extended build.
Best of luck though!

clueless new build

Thanks for your advice, I take everything you have outlined on board and it is something I think about a lot.

We have income protection in place for illness/disability. We have mortgage protection in place on our current mortgage and both have life assurance in place. Unemployment/getting fired isn't something we can insure for...

Our current LTV is approx 145%. Our plan is that the rental income from the existing property will cover the repayment on the new property (should receive minimum €600/m in rental income and repayment to be approx €500/m as we have saved approx 50% of the new build cost).

Mac0783

So the rent from your current house would be enough to cover the mortgage on the new build and you will / can continue to pay the mortgage on the first house?

I understand the maths but I don't know if a bank will take rental income into account when calculating how much you can borrow. Also have you factored in what if the house takes longer to rent or what you will do if your tenant moves our and the downtime between getting a new tenant in?

Am in a similar position myself at the moment so am doing all these calculations / permutations..

Gumbo

Tax implications on the rental income too.
Remember only 80% of the interest portion of the mortgage is allowable for tax purposes, every penny above this is profit.

Fayre

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