Self Build Mortgages (Article from 2008)

The self-build home & renovation market in Ireland and especially Donegal has grown rapidly in recent years and although the economy has seen a downturn in recent months in the residential development market, we have not experienced a downturn in the one-off self-builds.

As your mortgage broker, the Mortgage Centre Letterkenny Co Donegal can help you through the financial aspect of building your dream home, which in turn gives you the freedom to design your home to your individual needs and suitability.

There are many factors to be taken into account whether you require the full amount to purchase your site and build your home or if you only need the cost of building your home as you own or have been gifted the site. One of our Fully Qualified Mortgage Advisors can help you with all aspects.

The main difference between a self-build mortgage and a house purchase mortgage is:

A self-build mortgage money is released in stage payments as the build progresses rather than as one lump sum. Funds are drawn down in about four to five stages. As a result, you will only make monthly repayments on the amount you have drawndown.

Up to 100% finance is available for the cost of construction when you are building your own home.

The steps involved in financing your home are:

• Initially, meet with one of our Fully Qualified Mortgage Advisors to discuss your financial requirements. We will discuss the cost of your site and the cost of construction and will calculate the loan amount you will qualify for.
• You will need to employ a qualified architect/engineer to draw your house plans. He will then submit your planning application to your local authorities.
• You will now need to make a full mortgage application with supporting documentation based on the information provided on the application.
• On approval of the mortgage, a valuation will have to be carried out on the property, the house plans, planning permission and site map are required at this stage.
• On receipt of this valuation, the lender will issue the loan offer which is the official contract to be signed with your solicitor.
• Buildings under the course of construction and your life assurance must be in place for the funds to be released. In order to release the first payment, the lender will require a stage payment certificate to be completed by your architect/engineer.
• Your architect/engineer will have to furnish a stage certificate at the end of each stage in order to release the funds.

As the leading mortgage brokers in the North West of Ireland, we shop around for the best deal for you. Usually with self build mortgages, the loan amount as a percentage of the completed value of the property is quite low, therefore a more competitive mortgage interest rate could be available. We will also liaise with your architect/engineer at each stage in order to release your funds.

Article by: Reba McCoach is a Qualified Financial Advisor of John F Loughrey & Associates Ltd. t/a The Mortgage Centre.

Contact The Mortgage Centre, Crossview House, Letterkenny, Co Donegal today to arrange an appointment on 1890 518 518 or 00353 74 25800 or email mortgage@jfl.ie

Your Mortgage, free but priceless advice

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