Receiving the funds
The deposit needed to buy a property is far smaller when compared with the initial lump sum a self-builder needs to buy the land and get the first stage completed on site before the mortgage kicks in and cash arrives to fund the next stage.
Buy an existing property and the mortgage arrives in a lump sum; build and the money will come in stages as work on the property progresses.
The self-build home buyer is always ‘in arrears’ though some ‘advance’ mortgages can be found where the cash arrives at the start of each stage of construction.
The self-build mortgage traditionally has six stages:
• Land purchase
• Preliminary costs and foundations
• Wall plate level (brick and block) kit erected (timber frame)
• Wind and watertight
• First fix and plastering
• Second fix and completion