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Self Build Mortgage....question

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  • 24-02-2008 9:12pm
    #1
    snellers
    Closed Accounts Posts: 465 ✭✭


    Hi there,
    could anyone in the know or with experience of my situation please advise.

    My wife and I are currently going through pre-planning ...hoping to build a new home. We own outright the land the new house will hopefully go on and its value approx 230k (value of the land), with no outstanding loans
    Does anyone know if mortgage lenders take this asset into account when working out how much willing to lend us as well as the usual salary figure? (i.e.will they offer a higher amount as the land is acting as guarantor for the loan if we require it?)

    Thanks in advance for any info!

    Snellers


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    #2
    Victor
    Registered Users Posts: 78,400 ✭✭✭✭Victor


    They will usually take it into account. Take valuations with a grain of salt at the moment.

    However, they are likely to give you the money in stages. If you are looking for substantially less than the site value, it should flow quite quickly. If you are looking for the site value or more, they will keep the amount forwarded to you below the value of (site + part built house), which should be plent cashflow for you.

    They are likely to ask for a valuation of the site (estate agent) the house when complete (estate agent) and at the various stages (quantity surveyor or similar).


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    #3
    Ralph2
    Closed Accounts Posts: 6 ✭Ralph2


    Hi,

    Most banks will still only take your income to work out how much you can borrow.
    The big advantage of owning the land already is the loan to value of your property will be much less. For example if the land is worth 230000 an you are building house for 300000 then the loan to value is 56%. This means that you should get a low tracker mortgage and also be able to borrow the full cost of the property and even extra to furnish it. Again this depends on income.
    A good guide to work off is that most banks will lend 4.5 times your salary.
    This is only a rough guide as most banks now work off another method that is take to long to explain by email.
    Hope this helps


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    #4
    bakerbhoy
    Registered Users Posts: 586 ✭✭✭bakerbhoy


    Most institutes will give you 80 to 90 % of the site value to start off and further draw downs are on certified values of works completed.I am building at the moment and thats how it's working for me.


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