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Self Build Finance

  • 09-11-2020 1:35pm
    #1
    theboss80
    Registered Users, Registered Users 2 Posts: 1,838 ✭✭✭


    Hi All,

    Just wondering from those with experience from working on such projects what options were used in terms of financing a new self build whilst already having an existing mortgage? IS it simply the equity in current property plus whatever savings etc?


    Our current house is tucked into the corner of a half acre and would love to build a new house on existing land. Has anybody here done that before?


Comments

  • #2
    sheff the ref
    Registered Users, Registered Users 2 Posts: 618 ✭✭✭sheff the ref


    theboss80 wrote: »
    Hi All,

    Just wondering from those with experience from working on such projects what options were used in terms of financing a new self build whilst already having an existing mortgage? IS it simply the equity in current property plus whatever savings etc?


    Our current house is tucked into the corner of a half acre and would love to build a new house on existing land. Has anybody here done that before?

    The banks aren't massively interested to be perfectly honest. If you were to buy a house for a fixed sum of 350 grand, they would release the money a lot easier than if you were to self build for half that amount.

    If a Self Build is done over a longer term, there can be value to be got in terms of materials and labour, but the Banks aren't interested in the longer term. They want a finished self build that they can sell if things go wrong

    They have no interest in loaning money to put up walls, put a roof on, and sit on the project for a few years while paying them back.

    You will find that the bank will stress test your current mortgage payments to an extreme level and will then stress test a potential selfbuild mortgage. This will be a substantial monthly sum.

    The Banks will want to loan you money for more than you need, and aren't remotely interested in you being able to get a retired uncle to do the blockwork and roof the house for you as a hobby for himself. They want to loan you the X amount that they decide the house will cost, and it is up to you to qualify for that amount

    If you can cover both mortgages, and still have car and living expenses left over, you will probably get the money. And that is subject to having the savings, having no credit card debt and car loans.


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