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Self Build Financing

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  • 19-01-2009 9:01pm
    #1
    mr_edge_to_you
    Registered Users Posts: 3,111 ✭✭✭


    Hi,

    my first time using this so hopefully I'll post in the right area.

    Myself and herself have recently received planning permission on a family site. However I'm unsure as to how the banks deal with a self-build. For example, normally when buying a house the bank will lend you about 92% of the value and the buyer must be able to come up with the other 8%.

    When building your own home, what way does it work? Supposing my house is going to cost 250k to build will I need to come up with a deposit of 20k (8% of 250k)? Obivously the actual value of the property upon completion will be way above the borrowed amount of 230k. The house could be worth well over 300k when built given the location of the site. Do you still need to come up with a deposit of 8 to 10% of the consruction costs or will bank lend more on the basis that the site is already paid for?

    Any advice would be much appreciated - before I go into see them ourselves.


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    #2
    muffler
    Registered Users Posts: 46,083 ✭✭✭✭muffler


    I think this is more suited for the guys in the Accommodation & Property forum.

    Moved from Construction & Planning


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    #3
    mr_edge_to_you
    Registered Users Posts: 3,111 ✭✭✭mr_edge_to_you


    No worries, thanks.

    As I said my first post so wasn't entirely sure!


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    #4
    muffler
    Registered Users Posts: 46,083 ✭✭✭✭muffler


    Grand. These guys are worse than bank directors :D


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    #5
    Schuhart
    Closed Accounts Posts: 1,835 ✭✭✭Schuhart


    I don't know myself, but there's a few links off http://www.askaboutmoney.com/showthread.php?t=4690 that might be of interest. That said, I take it that stuff relates to before the bubble burst. I'd doubt that any bank in the current climate would lend a mortgage other than with the expectation that current property values will continue to fall.


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