Self Build Mortgage - Direct Labour Query

missOneill

Hi,

My husband and I are about to start applying for a mortgage self build using direct labour.

Background

1. We have secured the site (inheritance) and planning permission with the county council.

2. After much consultation we have decided to go down the direct labour route

3. Quotes from each tradesman is just about complete so we have a rough estimate of the costs and the architect is also advising on how competitive they are for what we are looking for.

4. Our architect is also a registered engineer so we are going to hire him to sign off each of the build phases.

Mortgage for self build/direct labour queries
(Thinking of applying to Ulster Bank)

1. As part of our application do we get the architect to verify the cost of the build by phases or will individual quotes from the tradesmen be required?

2. Even though the site is ours and there is no outstanding mortgage on it. How much of the build costs will the bank require us to contribute them? (I'm not a first time buyer)

3. Am I correct in saying we need to hold a 15% contingency fund for overruns?

4. I'm not sure how the funds for each stage are drawn down.....from online research I'm wondering if I'm correct in this being the process??

Phase...X

a) Worked agreed to be carried out in that phase is now completed

b) Engineer/architect confirms/signs off work and certifies same and sends to solicitor

c) Solicitor sends engineer/architect cert to bank and requests funds

d) Bank sends funds to solicitors

e) Labour and material is paid out of the fund

Or does the bank requires a copy of all invoices and receipts before they issue payment?

Any advise help would be very much appreciated!

Trish56

• Your lender will have a standard form of Supervision and detailed costings that must be completed by your supervising Architect Engineer. Cost of no less than €85/€90 per sq. ft. will be accepted for property outside Dublin.
• Lender will require a copy of planning permission and a copy of your supervising Architect/Engineers Professional Indemnity Insurance.
• You can borrow up to 80% of the value of site and construction costs.
• All lenders may differ re costs over runs usually 10% - not sure what Ulster Bank are.
• You must use your own savings up front and then mortgage can be drawn down in stages and must be certified by your Architect/Engineer.
• 10% of the loan amount will be retained until property is complete.
• Your Solicitor will request stage payments as required
• You will need to get a 'self build insurance policy.
• You need to discuss with your Solicitor re having two on mortgage and one on title if one of you were gifted the site and lender must agree not sure about Ulster bank allow this.

Hope the above helps
Trish

missOneill

Hi Trish56,
Thanks so much for the comprehensive reply. A lot to think about and get our heads around. Will chat to the solicitor more re: title in my husband name. Any tips on how to start the process of Self building insurance?
Thanks!

Trish56

You can PM me for details on Self Build Insurance if you wish.