Scottish Field

The mortgage for a house that isn’t even there?!

Building your dream home stays a dream for some but for others, it’s a reality. . . But at what stage do you think about financing – and do you know what type of mortgage you need?

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More people are choosing self-build to design their home for the look, environmen­tal credential­s and perfect fit for their circumstan­ces. Affordabil­ity and availabili­ty are key factors. Families are gifting land to children; older generation­s are opting for back garden downsizing builds and first-time buyers are creating their dream home because of a lack of housing.

A mortgage to help build a home is different from any mortgage you may have had before. With a traditiona­l residentia­l mortgage, a lender offers a mortgage for a completed house and right now yours is only on paper.

A self-build mortgage helps you stay financiall­y stable and money is released differentl­y, and, in most circumstan­ces, offered on a staged-payment basis – arrears or advanced (dependent on your lender).

These payments are arranged in accordance with your costings, which may differ throughout the build – you may need a higher amount to begin, for the footings, so the remaining staged payments will be smaller.

Some lenders allow self-build mortgages on interest-only terms whilst your house is being built, keeping monthly mortgage payments as low as possible which improves your cashflow.

Our best advice, from our own experience and that of our clients, is that a profession­al project manager gives peace of mind and saves money. Extra costs do creep in, so have a contingenc­y of between 10 and 15 percent built into your project. It is never too soon to speak to us.

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