If you dream of building your own home and need help financing your homebuilding project, it is important to seek expert mortgage advice early on, to develop a clear understanding of your budget and borrowing options.
We recommend BuildStore as your first point of call when thinking about your mortgage options. BuildStore is the UK’s leading mortgage brokerage, specialising in mortgages and finance designed specifically for homebuilding projects. BuildStore’s specialist mortgage advisors will recommend and tailor borrowing solutions to your financial circumstances, design and build specifications and payment schedule. They will have all the information you need about financing a self-build home.
BuildStore fully understands the complex and specialist experience required when financing a self-build house. It has built solid relationships with lenders and has created more than 40 exclusive mortgages, designed specifically to solve the common issues faced by individual homebuilders.
These unique funding solutions set them apart from other mortgage brokers, and this allows them to help many customers who otherwise may not have had the chance to build their dream home.
How do self-build mortgages work?
Self-build homes are built and paid for in stages. To align with this process, self-build mortgages release funds in stages rather than as a single payment. There are two types of self-build mortgage, and the type that you will require depends on these factors:
- How funds are released during the build
- Whether your stage payments are subject to an increase in the value of works completed
- Whether your stage payments are guaranteed based on your costs
Valuation Based Mortgage
You may be eligible for a Valuation-Based Stage Payment Mortgage in which funds are released after each stage of the building process is complete and where a valuation has taken place showing an uplift in value. This borrowing option may not suit your build payment terms if you’ve chosen a timber frame construction.
You may instead be eligible for the BuildStore Cost-Based Stage Payment Mortgage in which guaranteed payments are based on your build costs and released either before or after each build stage, depending on your build payment schedule.
How much can you borrow?
How much you can borrow depends on your financial circumstances. Like any mortgage, lenders will assess your income and outgoings to calculate what you can afford.
For a standard self-build mortgage, you can typically borrow up to 75% of your project costs. With BuildStore’s higher lending percentages, you could borrow up to 95%, or 100% if you already own your plot, with a maximum of up to 85% of the expected end value of your home.
The BuildStore Difference
- Specialist knowledge and expertise
- Competitive interest rates
- Exclusive products and lenders
- Interest-only payments during the build
- Guaranteed cost-based stage payments to coincide with your costs
- Ability to stay in your current home until your new one is complete
- Tailored cash flow to suit your build and payment schedule
- Borrow up to 95% of your land and build costs
Please note – your home may be repossessed if you do not keep up repayments on your mortgage.