Mortgage to build a house

dudmis

Does anybody know if the banks are giving out mortgages to build at the moment? How do they calculate how much they will give out before the house is built?

killers1

dudmis wrote: »

Does anybody know if the banks are giving out mortgages to build at the moment? How do they calculate how much they will give out before the house is built?

It depends on the bank to be honest as they each have their own criteria when it comes to a self build... most banks like to see you using your contribution up front at the site purchase stage and then they may fund 100% of the construction cost. Hard to give you exact details without more info on proposal...

the_syco

I doubt they'll give a mortgage to something that doesn't exist, because they can't sell a site with a few blocks on it to get back their money, if you get me?

killers1

the_syco wrote: »

I doubt they'll give a mortgage to something that doesn't exist, because they can't sell a site with a few blocks on it to get back their money, if you get me?

Sorry, but that response is ridiculous!

Dudmis to give you an idea of how it works in reality...

Assuming you qualify for the amount needed to buy the site & build the house this is how it would work in practical terms.. E.g you have €30k savings. The site costs €60k and the cost of construction is €150k giving the house a value when it's completed of €210k. The bank will look for you to put the €30 towards the purchase of the site i.e. you pay half, they pay half. They then will fund the full €150k to build the house and the funds are released in pre-agreed stage payments as the work progresses. At any time the bank will not have lent more than 92% of the combined value of the site + works carried out to date. The build will be supervised by an Architect or Engineer who will sign off on each stage the value of works carried out... You end up when the house is completed having a property work €210,000 and will have borrowed €180k in total (€30k to complete site purchase & €150k to build the property). I hope this helps!

bijapos

dudmis wrote: »

Does anybody know if the banks are giving out mortgages to build at the moment? How do they calculate how much they will give out before the house is built?

Yes banks are giving out mortgages for self builds.

How do they calculate? The ytake each case individually, they will look at your savings and credit record, wages, job prospects over the next years, possible chance of you defaulting, chances of resale and recouping any lost money etc etc etc. They are doing it now the same as they did years ago, the way of throwing money at anyone as they did the past few years is gone.

As each case is individual you should go talk to your bank manager yourself to get a ball park figure of what they will lend you, its the only way you will find out.

dudmis

Thanks for the replies everyone.

We've still yet to decide whether self build is the way to go but its good to know that the option is there.