What is cover in Mortgage for self build

JohnWick

I wondering if anyone can help me, I want to know what is covered in a Mortgage for a self build?

What costs do we have to come up with ourselves, I know the usual; professional fees, ESB, water, Council fees?

Does the mortgage cover everything else? I’ve heard that builders finish some times does not include kitchen, bathroom and ensuite, so does that mean we have to come up with that money ourselves or is it in Mortgage but not on builders cost?

I’ve very little knowledge on this any help would be appreciated.

dellas1979

Hi John! Am actually in the middle of a build myself, so I can answer a few question based on my experience. I'll assume you have a site.

Mortgage usually only covers the build. In my case, the bank gave me 3.5 times my salary. I was 25k short. So I had to put in my own cash (and am eligible for HTB scheme). The banks will make you break down on a costing form how much things are going to cost. This will be submitted with your mortgage application. For example, my budget is pretty tight, so the kitchen was costed as 3k or something. Of course kitchen is going to cost a bit more (so Ill will have to cover that myself).

Now, the bank did offer me more, but I didnt want it. Id prefer to have a small mortgage. In making that choice, I knew Id only have enough funds (mortgage + own funds) to get up to a builders finish. I will not have flooring, kitchen, stairs, bathrooms, doors (although these were accounted for in the costing form).

I want to get the shell of the house done to a very specific standard (passive house) so I decided to pump all the mortgage money into the build itself. The inside, I can do over time (bar the priorities below).

Builders finish for me is I will have walls and electrics, and I will get sanitary ware myself but installed by builders. I have a building company for convenience. They organise all the trades. When they are finished, I will try finish off things in priority. For example, bank wont let me draw down last of mortage until it is certified Ive a kitchen. So that's my priority once build is done.

Mortgage wont cover percolation (e500+), engineers (cost varies on what you use the engineer for), architects (up to 10k+ - this would probably get you up to builders drawings/tender), esb (2k), water (2k+).

Youd pay the bones of 12-15k+ before you even start to build.

I balance it all out in the fact that the build will take another 7 months (another 7k I can build up with savings), the HTB scheme, and Ill get cashback for the mortgage.

So I used my own money to pay the inital cost outlays (percolation, planning, archi fee) myself. Am using the mortage money for the build itself. And future money to finish it.

Hope the above makes some sense!

To make a long story short, as I say to everyone starting out, you need to figure out what you want, what you need, and what you can afford. If you want to walk into a turn key property, it will cost you more. If you can live in a few rooms and finish it off in time, so be it.

JohnWick

dellas1979 wrote: »

Hi John! Am actually in the middle of a build myself, so I can answer a few question based on my experience. I'll assume you have a site.

Mortgage usually only covers the build. In my case, the bank gave me 3.5 times my salary. I was 25k short. So I had to put in my own cash (and am eligible for HTB scheme). The banks will make you break down on a costing form how much things are going to cost. This will be submitted with your mortgage application. For example, my budget is pretty tight, so the kitchen was costed as 3k or something. Of course kitchen is going to cost a bit more (so Ill will have to cover that myself).

Now, the bank did offer me more, but I didnt want it. Id prefer to have a small mortgage. In making that choice, I knew Id only have enough funds (mortgage + own funds) to get up to a builders finish. I will not have flooring, kitchen, stairs, bathrooms, doors (although these were accounted for in the costing form).

I want to get the shell of the house done to a very specific standard (passive house) so I decided to pump all the mortgage money into the build itself. The inside, I can do over time (bar the priorities below).

Builders finish for me is I will have walls and electrics, and I will get sanitary ware myself but installed by builders. I have a building company for convenience. They organise all the trades. When they are finished, I will try finish off things in priority. For example, bank wont let me draw down last of mortage until it is certified Ive a kitchen. So that's my priority once build is done.

Mortgage wont cover percolation (e500+), engineers (cost varies on what you use the engineer for), architects (up to 10k+ - this would probably get you up to builders drawings/tender), esb (2k), water (2k+).

Youd pay the bones of 12-15k+ before you even start to build.

I balance it all out in the fact that the build will take another 7 months (another 7k I can build up with savings), the HTB scheme, and Ill get cashback for the mortgage.

So I used my own money to pay the inital cost outlays (percolation, planning, archi fee) myself. Am using the mortage money for the build itself. And future money to finish it.

Hope the above makes some sense!

To make a long story short, as I say to everyone starting out, you need to figure out what you want, what you need, and what you can afford. If you want to walk into a turn key property, it will cost you more. If you can live in a few rooms and finish it off in time, so be it.

Hi dellas1979

Thanks for the detailed feedback back i think I’m at bit more clear on everything now thanks again

Trish56

Hi Johnwick,
All lenders differ slightly on self builds. The most important thing for a self build is to be aware that if you are building outside Dublin that the minimum cost the bank will take into consideration when granting you a mortgage is €85 per sq. ft. and then you have to add in a further 10% for cost overruns and add extra for professional fees and Local Authority Development fees. Example would be build 2000 sq. ft. house = 170k plus 17k plus say 13k for extra's = 200k. If you are purchasing the site you need to add this to get the full project price and you can borrow 90% subject to valuation. If you get a gift of a site then you may be able to borrow 100% of the construction costs subject to valuation. Your supervising Architect/Engineer will have to submit detailed costings and the mortgage can be drawn down in stages. 10% will be held back until the property is complete and subject to final valuation. You will need to have kitchen fitted, bathrooms etc. as per the detailed costings. You can also pay interest only on the stage payments until complete or for1 year.

Hope the above helps. Some lenders are easier to deal with than others for a self build.

JohnWick wrote: »

I wondering if anyone can help me, I want to know what is covered in a Mortgage for a self build?

What costs do we have to come up with ourselves, I know the usual; professional fees, ESB, water, Council fees?

Does the mortgage cover everything else? I’ve heard that builders finish some times does not include kitchen, bathroom and ensuite, so does that mean we have to come up with that money ourselves or is it in Mortgage but not on builders cost?

I’ve very little knowledge on this any help would be appreciated.