Self build. Ran out of money. Options?

Cailin1234

Hi

Just wondering what other people have done in our situation. We are in the process of building a house. First time buyers. €200,000 mortgage with AIB. 1900sqft house with 420sqft garage. I have an excel file that I’ve been using to keep track of costs so I know that we don’t have enough money to finish the house. Have €100,000 of mortgage left to draw down but that will only pay the contractor. So kitchen, sanitary wear, heating, furniture & all these “extras” we didn’t know about, we have no money for. We ran into issues at the start with the site. Site needed a lot of digger work & stones etc so little change out of €20,000 there. Plus due to new building regs you can’t just stick an oil boiler & a few rads in anymore. It’s either that plus solar panels or a heat pump. More expense!
Been problem after problem after that & every problem was thousands to sort. We have spent quite a bit of our own money too but have nothing left now.

Is there such thing as a top up mortgage now? Or can you remortgage? I’m waiting on the bank to get back to me but would be good if I had an idea of options before that.

The least I’m thinking we’ll need is €40,000 which is a bit much of a credit union loan! I doubt we could afford to pay that plus our mortgage.

Any ideas what options there are for us?
I’ve already downsized the spending as much as possible.

Thanks

JimmyMW

Cailin1234 wrote: »

Hi

Just wondering what other people have done in our situation. We are in the process of building a house. First time buyers. €200,000 mortgage with AIB. 1900sqft house with 420sqft garage. I have an excel file that I’ve been using to keep track of costs so I know that we don’t have enough money to finish the house. Have €100,000 of mortgage left to draw down but that will only pay the contractor. So kitchen, sanitary wear, heating, furniture & all these “extras” we didn’t know about, we have no money for. We ran into issues at the start with the site. Site needed a lot of digger work & stones etc so little change out of €20,000 there. Plus due to new building regs you can’t just stick an oil boiler & a few rads in anymore. It’s either that plus solar panels or a heat pump. More expense!
Been problem after problem after that & every problem was thousands to sort. We have spent quite a bit of our own money too but have nothing left now.

Is there such thing as a top up mortgage now? Or can you remortgage? I’m waiting on the bank to get back to me but would be good if I had an idea of options before that.

The least I’m thinking we’ll need is €40,000 which is a bit much of a credit union loan! I doubt we could afford to pay that plus our mortgage.

Any ideas what options there are for us?
I’ve already downsized the spending as much as possible.

Thanks

Is this direct labor or a contract build? If contract, I cant see how heating is not part of the contractors scope, sanitary ware and a kitchen also. Also bear in mind the Bank hold 10% of the borrowings until the house is finished, heating, sanitary facilities and some form of cooking/kitchen facilities will be a must to get it signed off.

dragonfly!

Hi
Are you contract build or direct labour?
Contract would have to include some of the above - kitchen and sanitary ware as far as I know...
If you are direct labour your credit union MIGHT give you a home improvement loan?

Markcheese

No idea what stage your build is at, I assume when you mention the garage, it's built and roofed.. So probably not much to be saved there...
You only "need “ one bathroom /shower room.. And the basic white ware is cheap, forget tiling till later.. Dunno how many in your family but if you can ignore certain rooms do.. (unless you're already committed to paying for electrics, and 2nd fix carpentry)..
Get a basic kitchen, (try done deal, or your local Facebook buy and sell) you may have to fit it yourself... But it's almost like lego.. Paint concrete floors, varnish any upstairs floorboards..
The heating could be awkward, what have you planned for..? And is anything already done?

Check your contracts and agreements... Talk to your engineer.. Just to check...

Cailin1234

It’s a contractor that’s building it but my husband is a plumber so we excluded all plumbing from quotation. Kitchen was never part of the contractor quotation.
It’s not that we paying over the odds for those things, we just don’t have the money for them.

What I’m really trying to ask is what options with the bank there are. I know how in theory we can leave certain rooms, pick a cheap kitchen, etc but what I want to know is - has anyone been in the same situation & got further funds from the bank through their mortgage or a variation of a mortgage.
Credit union loans are more expensive so we really wanted a “top up” of our mortgage but don’t know if they exist anymore.

Edit: 1st fix is done. I have already picked my kitchen, sanitary wear, tiles etc & put down deposits so really don’t want to change. I’m sure we would get a credit union loan for those things but I would rather all was part of the one mortgage.

Hitman3000

Cailin1234 wrote:

Edit: 1st fix is done. I have already picked my kitchen, sanitary wear, tiles etc & put down deposits so really don’t want to change. I’m sure we would get a credit union loan for those things but I would rather all was part of the one mortgage.

Your best bet is go back to the bank and chat to with whoever helped get the mortgage in the first instance. It may also help if you can get an estate agent to give you a valuation on the likely value of the completed project.

JimmyMW

Cailin1234 wrote: »

It’s a contractor that’s building it but my husband is a plumber so we excluded all plumbing from quotation. Kitchen was never part of the contractor quotation.
It’s not that we paying over the odds for those things, we just don’t have the money for them.

What I’m really trying to ask is what options with the bank there are. I know how in theory we can leave certain rooms, pick a cheap kitchen, etc but what I want to know is - has anyone been in the same situation & got further funds from the bank through their mortgage or a variation of a mortgage.
Credit union loans are more expensive so we really wanted a “top up” of our mortgage but don’t know if they exist anymore.

Edit: 1st fix is done. I have already picked my kitchen, sanitary wear, tiles etc & put down deposits so really don’t want to change. I’m sure we would get a credit union loan for those things but I would rather all was part of the one mortgage.

Given where you are the €40k seems tight, if your approaching the bank for more money, make sure it will get you to completion one way or another.

sydthebeat

First off the banks absolutely do not like people coming back in for top ups to complete builds.

When applying you were supposed to fill out a detailed breakdown of the cost of construction of each element of the build, so the cost of your heating system and building reg compliance shouldn't have been a surprise to you. The current renewable regs have been in for 7 years already.

Leaving rooms unfinished is also a big no no. The bank does not want to be left in a situation where, if they repossess, they are left with an unfinished house.

I think what you need to do is to do a VERY detailed breakdown of your remaining costs, with the cloth very much cut to measure. Show where unforseen cost over runs occurred to date (with proof ie receipts invoices etc)

Obviously don't include the garage in the costs, the house is much more important. If you've started already on the garage, figure out how you can quickly and most economically, leave it till later.

Calahonda52

Hitman3000 wrote: »

Your best bet is go back to the bank and chat to with whoever helped get the mortgage in the first instance. It may also help if you can get an estate agent to give you a valuation on the likely value of the completed project.

Banks don't do chats.
It is almost a certainty that you wont meet the same person because once the mortgage is drawn down, even in part, it goes into another section.

[I was in this game for 20 odd years so just might know a bit]

sydthebeat wrote: »

First off the banks absolutely do not like people coming back in for top ups to complete builds.

When applying you were supposed to fill out a detailed breakdown of the cost of construction of each element of the build, so the cost of your heating system and building reg compliance shouldn't have been a surprise to you. The current renewable regs have been in for 7 years already.

Leaving rooms unfinished is also a big no no. The bank does not want to be left in a situation where, if they repossess, they are left with an unfinished house.

I think what you need to do is to do a VERY detailed breakdown of your remaining costs, with the cloth very much cut to measure. Show where unforseen cost over runs occurred to date (with proof ie receipts invoices etc)

Obviously don't include the garage in the costs, the house is much more important. If you've started already on the garage, figure out how you can quickly and most economically, leave it till later.

OP, this is some of the best advice you will get.

I am not trying to put the frighteners on you here but

You need to be ready for a rough passage here with the bank: they will be all over this/you like a rash.

If I was across the desk I might take the view that you deliberately under priced the job so as to get the mortgage.

You will most likely have a bank surveyor out so as advised above, full disclosure, with the most minute detail attended to, will get you through this but it won't be just a casual chat.
ps, don't be so sure of the CU, you will need full disclosure here also and as the bank has first charge on the project, the CU might baulk at shelling out now.

I know I would if i was the CU lender.
PS

whats the loan to value calc here:
what was the deposit you had to put up?
Who paid for site?

Mortgage 200,000
your additional spend xx,000
to finish: you say 40,000

Gumbo

Cailin1234 wrote: »

Hi

Just wondering what other people have done in our situation. We are in the process of building a house. First time buyers. €200,000 mortgage with AIB. 1900sqft house with 420sqft garage. I have an excel file that I’ve been using to keep track of costs so I know that we don’t have enough money to finish the house. Have €100,000 of mortgage left to draw down but that will only pay the contractor. So kitchen, sanitary wear, heating, furniture & all these “extras” we didn’t know about, we have no money for. We ran into issues at the start with the site. Site needed a lot of digger work & stones etc so little change out of €20,000 there. Plus due to new building regs you can’t just stick an oil boiler & a few rads in anymore. It’s either that plus solar panels or a heat pump. More expense!
Been problem after problem after that & every problem was thousands to sort. We have spent quite a bit of our own money too but have nothing left now.

Is there such thing as a top up mortgage now? Or can you remortgage? I’m waiting on the bank to get back to me but would be good if I had an idea of options before that.

The least I’m thinking we’ll need is €40,000 which is a bit much of a credit union loan! I doubt we could afford to pay that plus our mortgage.

Any ideas what options there are for us?
I’ve already downsized the spending as much as possible.

Thanks

190 Sq. M build with a 200k mortgage should have set alarm bells off from the start. Did you have any savings yourself?

You should have been advised the cost to finish would be about 300k plus.

Can’t blame building regs either as renewables in place since 2011. You should have a preliminary BER BEFORE you started on site and it would have detailed what exactly you needed.

The banks will require kitchens and bathroom fitted for final draw down too.

rayjdav

You say its a contractor build? Surely you tendered it with all aspects set out i.e. site works, build, fitout finishes etc? Prices compared to drawings not ring alarm bells. Who produced drawings and spec?
Too late to be asking these questions I know but if someone else is reading the thread they may learn....

mayota

Cailin1234 wrote: »

Hi

Just wondering what other people have done in our situation. We are in the process of building a house. First time buyers. €200,000 mortgage with AIB. 1900sqft house with 420sqft garage. I have an excel file that I’ve been using to keep track of costs so I know that we don’t have enough money to finish the house. Have €100,000 of mortgage left to draw down but that will only pay the contractor. So kitchen, sanitary wear, heating, furniture & all these “extras” we didn’t know about, we have no money for. We ran into issues at the start with the site. Site needed a lot of digger work & stones etc so little change out of €20,000 there. Plus due to new building regs you can’t just stick an oil boiler & a few rads in anymore. It’s either that plus solar panels or a heat pump. More expense!
Been problem after problem after that & every problem was thousands to sort. We have spent quite a bit of our own money too but have nothing left now.

Is there such thing as a top up mortgage now? Or can you remortgage? I’m waiting on the bank to get back to me but would be good if I had an idea of options before that.

The least I’m thinking we’ll need is €40,000 which is a bit much of a credit union loan! I doubt we could afford to pay that plus our mortgage.

Any ideas what options there are for us?
I’ve already downsized the spending as much as possible.

Thanks

Be careful approaching the bank at this stage of drawdown they might get spooked and hold the remaining while a detailed review takes place.

Robert Allen

Dont worry - it might not be as bad as some are suggesting.

We were in the similar situation (self build over a number years, zero advice on costs from the Architect & At no stage were we required to hire a Quantity surveyor....plus rising costs of materials and other unforeseen issues with the build etc etc.)

The advice was to get your Auctioneer to do an up to date valuation of the job. The price of land, the cost of homes and the value of the overall work done to date will have risen since the first valuation / start of build.

On this basis they should give the extra few euro to finish it off.

Some of the other posts may be accurate but they sound very scary!

We were in same boat and got sorted.

Talk to your Mortgage person in th Bank.

Best of luck.

Calahonda52

Robert Allen wrote: »

... The price of land, the cost of homes and the value of the overall work done to date will have risen since the first valuation / start of build.

On this basis they should give the extra few euro to finish it off.
..

Cost yes but not value

The OP is looking for maybe another 30% of the original:hardly a few extra.

To be helpful to the OP, you need to give euro specifics and when you sorted it time line wise

Robert Allen

Calahonda52 wrote: »

Cost yes but not value

The OP is looking for maybe another 30% of the original:hardly a few extra.

To be helpful to the OP, you need to give euro specifics and when you sorted it time line wise

I think the OP will find it helpful. In fact it is probably the most helpful reply to date.

It offers a route to explore as well as easing her fear that she wont be able to build/finish/live in her house.

Im sure she will contact me if more detail is required but, as i mentioned, her mortgage person in the bank & Auctioneer are the best people to speak to. (I just remembered that they will only give a top up of a certain % of the original mortgage - possibly around 15% - 20% maybe? Maybe im wrong but Again, the bank persons can tell you this)

As for your cost v value comment - it would be correct to assume that the valuation upon completion would be higher now than it was at the beginning of the build. That is a good reason to give the extra money so long as the cost of building it is lower than the valuation upon completion - which probably is the case.

The only way there might be a problem is that if she took the max drawdown available to her. If she was offered more originally then it shouldnt be a big problem now if her circumstances are the same. Either way thats none of my business.

I can read. I know its 40000 extra. No need to get hung up on my choice of words - relax!!!!

Again, to the Original poster - you have options. Its also in the banks interest for you to build the house remember!! They would rather have a completed house on their books than unfinished one so they will play ball. The process is a pain, as is paying back the money obviously but explore a few options and best of luck.

(I Dont want to get your hopes up but we were in a very similar situation, similar figures etc and it worked out for us.)

Any other Qs just contact/ Dm if you want.

Rob.

listermint

In fairness going back to the bank whilst they still have 100K to draw down. May not be the most Sage advice until they have a fully accurate understanding of what is left to get some standard in there.
Kitchen bathroom electrics plumbing heating, Obviously weather tight.


alarm bells.

Robert Allen

listermint wrote: »

In fairness going back to the bank whilst they still have 100K to draw down. May not be the most Sage advice until they have a fully accurate understanding of what is left to get some standard in there.
Kitchen bathroom electrics plumbing heating, Obviously weather tight.


alarm bells.

I get what you are saying but they seem to be on top of it now - i.e. they have a plan, have looked at their figures, and they know well in advance it will be an issue.

Its better knowing now and trying to tackle it than leaving it until the 100k is gone id say.

Its a crap situation to be in.

Id advise that the banks should insist on a QS report during the mortgage application process. At the moment The Architect fills out a costings template but many dont put too much time into seeing could it actually be built for the amount being drawn down.

If i went to our Architect and said i want to build a top spec 300sqft house for €100,000 he would make up costings to fit the figures as opposed to asking any questions.

Cailin1234

Lads, I didn’t write this post for a lecture. I’m not an idiot. I asked for advice from people who have been in this situation as to how they got on with the banks.
There have been unforeseen costs due to bad ground etc. & we have opted for better heating system & better quality in most things. Overall it’s definitely gone from being a standard spec house to a high spec. My builder joked that I have been watching too much of Dermot Bannon.
I could in theory “finish” the house by cutting back on things I want but I don’t want to do that. It’s my 1st & last time building a house & I don’t intend on doing it on the cheap as I’m the type of person that if I pick something that I don’t love it’ll bug me forever. Our salaries would have allowed us to take more of a mortgage but we were led to believe we had to make it all come in at €85 per sq ft or we mightn’t get it. So our engineer costed it out to purposely come in at that amount. We have used our own cash but I still don’t believe it could have been done for €200k.

I have had a phone call with our mortgage advisor who said we could possibly get a home improvement top up as we have enough left to pay the contractor so in theory, in their eyes we have enough to finish it. I will know more on this soon.

So thank you for the constructive replies.

Robert Allen

Cailin1234 wrote: »

Lads, I didn’t write this post for a lecture. I’m not an idiot. I asked for advice from people who have been in this situation as to how they got on with the banks.
There have been unforeseen costs due to bad ground etc. & we have opted for better heating system & better quality in most things. Overall it’s definitely gone from being a standard spec house to a high spec. My builder joked that I have been watching too much of Dermot Bannon.
I could in theory “finish” the house by cutting back on things I want but I don’t want to do that. It’s my 1st & last time building a house & I don’t intend on doing it on the cheap as I’m the type of person that if I pick something that I don’t love it’ll bug me forever. Our salaries would have allowed us to take more of a mortgage but we were led to believe we had to make it all come in at €85 per sq ft or we mightn’t get it. So our engineer costed it out to purposely come in at that amount. We have used our own cash but I still don’t believe it could have been done for €200k.

I have had a phone call with our mortgage advisor who said we could possibly get a home improvement top up as we have enough left to pay the contractor so in theory, in their eyes we have enough to finish it. I will know more on this soon.

So thank you for the constructive replies.

I 100% agree on the lecturing on here, its rampant. Though you do get a few good posters who actually answer your questions.

Apologies if it came from my end.

Someone just removed my subscription from this thread in the past few minutes so send me on a DM if you need advice or help with anything.

Im same Bank in south east with a helpful mortgage Advisor in there.

Again, best of luck.

JimmyMW

Cailin1234 wrote: »

we were led to believe we had to make it all come in at €85 per sq ft or we mightn’t get it.

Can you elaborate on this, who led you to believe this? The bank?

listermint

Cailin1234 wrote: »

Lads, I didn’t write this post for a lecture. I’m not an idiot. I asked for advice from people who have been in this situation as to how they got on with the banks.
There have been unforeseen costs due to bad ground etc. & we have opted for better heating system & better quality in most things. Overall it’s definitely gone from being a standard spec house to a high spec. My builder joked that I have been watching too much of Dermot Bannon.
I could in theory “finish” the house by cutting back on things I want but I don’t want to do that. It’s my 1st & last time building a house & I don’t intend on doing it on the cheap as I’m the type of person that if I pick something that I don’t love it’ll bug me forever. Our salaries would have allowed us to take more of a mortgage but we were led to believe we had to make it all come in at €85 per sq ft or we mightn’t get it. So our engineer costed it out to purposely come in at that amount. We have used our own cash but I still don’t believe it could have been done for €200k.

I have had a phone call with our mortgage advisor who said we could possibly get a home improvement top up as we have enough left to pay the contractor so in theory, in their eyes we have enough to finish it. I will know more on this soon.

So thank you for the constructive replies.

'Constructive'


You blamed the ground works first. Which means you left no money over for contingency. If you had done that then you would have had the groundwork solved.

Then you went on to say that you got better quality everything. you just listed it there in your comments.


Frankly i think this may be a windup and you chose the forum for the gas.

I dont see how a bank gave you clearance for that size house for that budget. it all seems a bit of a cod.

Cailin1234

JimmyMW wrote: »

Can you elaborate on this, who led you to believe this? The bank?

Yes, the bank. I don’t remember the exact conversation but we nodded & agreed for fear of being turned down. We both went away thinking we needed to do it for €200k. Which sounded like loads at the time so we were just glad to get it & assumed it could be done because people smarter than us came up with that figure, not us.

Cailin1234

listermint wrote: »

'Constructive'


You blamed the ground works first. Which means you left no money over for contingency. If you had done that then you would have had the groundwork solved.

Then you went on to say that you got better quality everything. you just listed it there in your comments.


Frankly i think this may be a windup and you chose the forum for the gas.

I dont see how a bank gave you clearance for that size house for that budget. it all seems a bit of a cod.

Yes, I made all this up just so I could chat with smart arses like yourself.

The bank did in fact tell us that. But you with your superior knowledge in all things banking/construction know better obviously.

Yes I picked higher spec stuff thinking that we could afford it with our own money & current wages but unfortunately other extras were substantially more than we thought.

Clearly the people who are doing the lecturing & giving smart comments didn’t read the post properly/didn’t understand that I was asking about what people did with regards extra finance. I didn’t say “Please mock & lecture me” anywhere in the post, did I?

This will be my last time asking a question on this.

JimmyMW

Cailin1234 wrote: »

Yes, the bank. I don’t remember the exact conversation but we nodded & agreed for fear of being turned down. We both went away thinking we needed to do it for €200k. Which sounded like loads at the time so we were just glad to get it & assumed it could be done because people smarter than us came up with that figure, not us.

The only way I can see logic in this is if you are building in an area with a max ceiling price for property and the banks were only willing to lend €200k so as not to be in neg equity. If so you should have built a suitably sized and spec'ed house to suit the €200k not adjust the figures to suit the design and spec you want.

FYI why your receiving a negative reaction or "lectures" as you referred to it as, is because there are countless threads on here of people self building (some of whom state that they have no clue of building in their opening post) who maintain they can do a self build significantly cheaper than what the professionals and people who have gone through the process here advise. The odd one will for a number of reasons, primarily they can carry out a lot of work themselves, but the vast majority will exceed the costs the professionals advise due to choosing high end fixtures and fittings etc.

listermint

Cailin1234 wrote: »

Yes, I made all this up just so I could chat with smart arses like yourself.

The bank did in fact tell us that. But you with your superior knowledge in all things banking/construction know better obviously.

Yes I picked higher spec stuff thinking that we could afford it with our own money & current wages but unfortunately other extras were substantially more than we thought.

Clearly the people who are doing the lecturing & giving smart comments didn’t read the post properly/didn’t understand that I was asking about what people did with regards extra finance. I didn’t say “Please mock & lecture me” anywhere in the post, did I?

This will be my last time asking a question on this.

You could / can lower the fittings cost if you wanted to. This would not impact you financially.

That is your choice, it was also not the banks.


You could also go back to the mortgage provider , inform them what has occurred and they could choose to hold out the rest of the drawdown entirely. Or they could choose to give you a small bit more.

Or as you said you can go to the credit union and get an incredibly high rate for a personal loan.

All of this under the assumption that the money coming can support this.


Id be in real thought process mode about whats important regards fittings and fixtures. Its cop on time now with regards your finances. Time to get serious and im sorry that might come across harsh. But its that time.

Goldengirl

This post has been deleted.

Calahonda52

Robert Allen wrote: »

If i went to our Architect and said i want to build a top spec 300sqft house for €100,000 he would make up costings to fit the figures as opposed to asking any questions.

Really, and he or she is a registered architect?

Cailin1234 wrote: »

.....I have had a phone call with our mortgage advisor who said we could possibly get a home improvement top up as we have enough left to pay the contractor so in theory, in their eyes we have enough to finish it. I will know more on this soon.

The mortgage advisor is not the bank.
Home improvement top up for maybe 50K on top of 200k on an unfinished building..
Really!

ustari

Don't think you are in a position to be getting all high and mighty in here.

You have made decisions that have led you to this position. You chose to ignore the reality of how much it would cost and then admitted to overspending in areas.

We received a top up equivalent to 5% of our initial mortgage to finish things off around the place (landscaping, gate etc) and it was relatively simple but bank wanted revaluation and detail of what we were going to spend the money on.

I hope you don't have the same attitude with the bank when you are requesting the additional funds, it doesn't come off well and makes you appear quite blasbout the money/spending.

Tefral

JimmyMW wrote: »

Can you elaborate on this, who led you to believe this? The bank?

I have no connection to this, but I will collaborate her story with the €85/ft. I am a QS by trade and I was given the exact same spiel by the Mortgage adviser in the bank when I went for my own. I laughed in her face. She then relented and said they were seeing costings come in over this.

Few things not adding up and I cant understand about this is.

1. If this is a self-build (which is weird as you have a contractor). You should have had a detailed costing certificate done up by a QS. If this is incorrect the bank will most likely come after his/her professional indemnity insurance. Being out 10% is the max, €100k is inexcusable.

2. If you engaged the services of a builder, you would have / should have signed a contract, this would have been based on drawings and a specification. Whats happened with this? Why has this overrun happened without a proper change order verification process?

They figures you have indicated you require to finish - how are you checking these are accurate?

The bank will give you a top up subject to a detailed examination. I've know them to send QS's to check work on site monthly after so be prepared to be put under the spotlight.

Calahonda52

ustari wrote: »

Don't think you are in a position to be getting all high and mighty in here.

You have made decisions that have led you to this position. You chose to ignore the reality of how much it would cost and then admitted to overspending in areas.

We received a top up equivalent to 5% of our initial mortgage to finish things off around the place (landscaping, gate etc) and it was relatively simple but bank wanted revaluation and detail of what we were going to spend the money on.

I hope you don't have the same attitude with the bank when you are requesting the additional funds, it doesn't come off well and makes you appear quite blasbout the money/spending.

Was the house finished and certified at the time you asked for the top up?

Tefral

Calahonda52 wrote: »

Was the house finished and certified at the time you asked for the top up?

My guess it was!!

Its certainly not a simple process.