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| Self Build Mortgages |
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| Building your own home has become
increasingly popular in recent years with soaring property prices
making it harder than ever to get ahead in the property market. |
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A self-build mortgage is exactly what it says,
a home loan you take out to finance building your own house. When
you take out a self-build loan the money is released in installments,
with an initial loan to buy the land. |
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| Payments are then made at different stages
of building the property. Make sure you ask whether the payments are
made at the start of each stage or the end as this could make a real
difference to the state of your finances. |
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| How much you can borrow depends on the mortgage
provider, although as a rule most lenders will lend no more than 75%
of the cost of the land, or around 60% of build costs. One exception
is self-build specialists Buildstore, who lend up to 95% of the value
of land. |
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| Generally speaking, because these
are such niche mortgages, lenders tend to charge higher rates than
normal. Apart from the usual credit checks, some lenders will refuse
to give you a mortgage if you are planning to actually build the house
yourself, rather than having it professionally designed and built
for you. |
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Think
carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your
mortgage. |
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| Copyright © RT Financial 2006-08. All rights reserved. |
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