Can I get a mortgage to build my own home? - Self build mortgages

For anyone considering building your own home, you will need some specialist advice. At Aspire Financial Services we understand the apparent complexity of financing such a project and can explain this in simple terms, then source the best funding option.

In some ways, self-build mortgages are similar to residential mortgages, in the sense that you take out a loan to buy a property. However, with a residential mortgage the mortgage funds are released as a single lump sum to purchase a property, with a self-build mortgage the lender releases the money in stages (sometimes known as tranches) throughout the various stages of the build process.

Having found a plot of land with the correct planning permission, you may be able to obtain a mortgage to purchase it. A lender might offer from 50% of the value of the land up to a maximum of approximately 75%. Depending on your circumstances and your plans, you might want to seek as much lending as you can on the land and use your own funds towards the build costs, reducing the number stages required.

Each lender with specify their own timescales when it comes to releasing the funds. Typical stages however include the release of funds for the initial land purchase, then further releases when the property build reaches key milestones such as, completed to first floor level, completed to eaves, then when the roof is made watertight. The final stage is when the build is completed. It’s also quite common for the mortgage to be on an interest-only basis during the build, then switching to a repayment type at the final release of funds.

For most, a self-build home is often a dream project with a lot at stake so it is vital to have the right funding provider on board. Contact Aspire Financial Services today to start the conversation and we will help you find the most suitable lender for your self-build project.

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