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How do I finance a self build?

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  • 25-03-2008 7:01pm
    #1
    beetlebailey
    Registered Users Posts: 207 ✭✭


    Hi All,

    I`m thinking about building a house on the land on the side of my house and then sell it. My question is how do i go about financing it? My own house is valued at about 400k and my mortgage is about 210k. Really what i`m wondering is repayments on a loan,I basically couldn`t afford to pay monthly repayements on top of my current mortgage, i could only afford to pay back the loan once the house is sold.

    I know this may seem a stupid question but would it be possible to get a bank loan to build a house and not have to pay the loan until i sell the new house??

    Any advice would be great.
    Thanks,


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    #2
    yop
    Moderators, Home & Garden Moderators, Regional Midwest Moderators, Regional West Moderators Posts: 16,724 Mod ✭✭✭✭yop


    I am not sure about that, but I know that we paid an interest only loan during the process of the build.
    So our first draw down was for examplr 40k, we paid monthly X amount on the interest of the 40k, then the next draw down was say 50k, then we paid X amount on the interest of 90k. SO we only started paying the full amount after the final drawdown.


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    #3
    snellers
    Closed Accounts Posts: 465 ✭✭snellers


    as an alternative (less money to be made but a lot less hassle) you could get plans drawn up for a suitable dwelling on the land and get planning permission. The land can then be sold with full planning permission at a premium price. Wouldnt cost more than a couple of thousand (possibly a lot lower)
    Would suggest going to a pre-planning meeting to ascertain if there is any point in attempting a planning app (this is free)


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    #4
    muffler
    Registered Users Posts: 46,091 ✭✭✭✭muffler


    This is a financial query and therefore not for this forum. I'll move it over to the Accommodation & Property forum - not even sure if thats the right place for it but if not Im sure Victor will do the necessary :)


  • Options
    #5
    Victor
    Registered Users Posts: 78,400 ✭✭✭✭Victor


    There are a number of options available, especially as you have nearly 50% equity, the banks will look a bit more favourably on things. You could ask for some sort of moritorium on payment, but the bank will want to make sure that if it doesn't sell, that you can afford the repayments.

    Essentially you get a top up mortgage and build the second house. The bank may only release the money in stages, depending on the value of the work on site.

    It might be more tax efficient to extend your house and then subdivide, but subdivision would need a new planning permission.


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