Ran out of money during self build. Options?

Cailin1234

Hi

Just wondering what other people have done in our situation. We are in the process of building a house. First time buyers. €200,000 mortgage with AIB. 1900sqft house with 420sqft garage. I have an excel file that I’ve been using to keep track of costs so I know that we don’t have enough money to finish the house. Have €100,000 of mortgage left to draw down but that will only pay the contractor. So kitchen, sanitary wear, heating, furniture & all these “extras” we didn’t know about, we have no money for. We ran into issues at the start with the site. Site needed a lot of digger work & stones etc so little change out of €20,000 there. Plus due to new building regs you can’t just stick an oil boiler & a few rads in anymore. It’s either that plus solar panels or a heat pump. More expense!
Been problem after problem after that & every problem was thousands to sort. We have spent quite a bit of our own money too but have nothing left now.

Is there such thing as a top up mortgage now? Or can you remortgage? I’m waiting on the bank to get back to me but would be good if I had an idea of options before that.

The least I’m thinking we’ll need is €40,000 which is a bit much of a credit union loan! I doubt we could afford to pay that plus our mortgage.

Any ideas what options there are for us?
I’ve already downsized the spending as much as possible.

Thanks

phormium

The value of the finished house and your income will determine whether there is wiggle room to increase the mortgage either by remortgaging or top up so really only the bank can tell.

Only other alternative then as you say is credit union loan but higher rate obviously.

TheShow

talk to your bank, they wont be pleased, but wont want a half finished house on the books either.

Water John

IWT they might need and you a quantity surveyor on board. Tie down the final finish price. Wouldn't see them giving out another €40K. I know you have it on a spreadsheet and not the back of an envelope, but that is all it would mean to them without a qualified person to stand over it. Sorry it happened to you.

_Brian

How can kitchen, sanitary & heating be surprises in a self build that you didn’t know about ???

Water John

I looks like it was priced without any contingency margin. So extras early on ate into the allowed slim budget.

JustJoe7240

_Brian wrote: »

How can kitchen, sanitary & heating be surprises in a self build that you didn’t know about ???

That's clearly not what the OP said, she said they have run out of money for the kitchen and sanitary, due to extra ground work required.

Trasna1

_Brian wrote: »

How can kitchen, sanitary & heating be surprises in a self build that you didn’t know about ???

I think it could easily happen to someone to someone who hasn't dealt with the building industry before. They might expect when they instruct the builder to build me a house to get it in a turn key condition. Understanding what had been priced for is key.

Situations like the OP find themselves in really are illustrative of why non building professionals should give serious consideration to employing competent professionals to act on their behalf during a self build. I know it's a bit late for the OP and this feels like I'm being wise with hindsight, but hopefully someone else might find this useful.

To the OP, a house can be kitted out rather cheaply if you focus on the essentials and go for used household goods. You really only need a bathroom, kitchen bedroom and livingroom so a top up loan and learn DIY and you'll have it livable in no time. Work on the remainder as funds become available

Fann Linn

Don't mind me asking but did anyone from the bank, or on their behalf, come out on site and check the build? A girl I know did a self build also and as far as I can recall someone came out at foundation level, window level, roof level and just prior to completion and monies were drawn down at each stage providing the build was stisfactory.
Did you have no one assisting or providing oversight?

punisher5112

Could some of the work be done by yourselves?

Any family that could help with some of the work or a few quid to get you by.


Credit union loan?

Shop around and sure put in the essential items and if you have to work on a room or 2 further down the road so be it.

TheShow

Fann Linn wrote: »

Don't mind me asking but did anyone from the bank, or on their behalf, come out on site and check the build? A girl I know did a self build also and as far as I can recall someone came out at foundation level, window level, roof level and just prior to completion and monies were drawn down at each stage providing the build was stisfactory.
Did you have no one assisting or providing oversight?

A bank person wouldn’t do that, instead the supervising architect or engineer would confirm this to the bank at each stage of drawdown. But they are mostly concerned with the structure rather than the cosmetic fit out.

Bigus

Good advice from trasna above,
in addition I'd say, finish the master bedroom one basic bathroom, put in small temporary kitchen units even secondhand , put some cheap (temporary)Lino On the kitchen floor, so now you have the comfortable basics, and as you earn more funds do each bit of most importance next with stuff bought cheaply from donedeal and adverts.

One big advantage is you'll have a smaller mortgage than most this way and bit by bit was the Standard way to do things for years.

Consider releasing cash by selling a good car for a banger as well ,temporarily give up the pub , restaurants take aways holidays, and do the work yourselves or do overtime and pay others.

No shame in any of the above , in fact your friends and family should commend you for your thrift.

Water John

Lots of people renew kitchens and want rid of the old one. Picked up one last year for free, just to take out, only 10 years old. Ask around workmates etc.

Victor

Cailin1234 wrote: »

1900sqft house

That's a large house by most standards. Don't fit out beyond what you actually need.

420sqft garage.

If this is a separate building, don't build it.

happywithlife

Hard to believe you didn't forecast kitchen heating furniture or was it just the unexpected extras have eaten into the budget and What you had allocated has been eaten up? Thst makes nore sense.
We did a self build nearly 10 yrs ago and started out with nought in thecwsybof furniture etc
My advice would be
Source the kitchen online - absolutely loads if very excellent kitchens abailable at very little/no cost-- don't compromise 2nd fix electrics etc around this though -- stuck to whatever you will need longer term - e.g. in terms of sockets etc
Same with bathroom ware actually. I recently replaced my bathroom sink & pedestal as I wanted a built in unit with storage but the sink is fine. I couldn't give it away (actually still in garage in cork if you want it lol)
Kit out the bare basics as others have suggested.
Again plenty of fine furniture available online if you look -- esp if you start picking things up as you go along and spread the cosy. Usually all it needs it a light sand down and a lick of paint. Lots of upstyling / upcycling tutorials now online as its very fashionable
I'd paint any floors in rooms you decide not to do up just yet with cement paint to keep the dust someway manageable

Put away kitchen essentials towels etc as and when you can
I used Dunnes vouchers for this so didn't feel.it hit my pocket as much.

Having said all that though...if the payments for either the top up or a CU loan are manageable I'd go down that route and do it once/do it right but there are alternatives and no point Having a lovely kitchen with all the mod cons if you're eating beans on toast every night

Eta holy crap sorry for all the terrible typos -- on the phone & screen is hard to read

BarryD2

punisher5112 wrote: »

Could some of the work be done by yourselves?

Shop around and sure put in the essential items and if you have to work on a room or 2 further down the road so be it.

Echo first point - I know self build is a very loose term, but getting stuck in yourself where you can could make a big difference. Get the essentials done and finish off in time, as your labour and money allow.

Cailin1234

_Brian wrote: »

How can kitchen, sanitary & heating be surprises in a self build that you didn’t know about ???

If you read my post properly you would see that I am saying I don’t have anything left for those things as I’ve spent the money on extra groundworks & essential extras that weren’t thought to be necessary in the beginning.

Clearly I knew I had to put in a kitchen, sanitary wear & heating.

Thanks for the intelligent input.

Cailin1234

Victor wrote: »

That's a large house by most standards. Don't fit out beyond what you actually need.

If this is a separate building, don't build it.

Garage is built. AIB allowed €85 per sqft so that’s almost €200,000 to build house & garage. If we didn’t build the garage they wouldn’t have given us €200k.
Our incomes would have allowed us to get substantially more of a mortgage but you have to build a bigger house to get more initially. So I’m hoping they’ll give us more now in some form of top up. Waiting on a phone call from the mortgage advisor.

fits

Cailin1234 wrote: »

Garage is built. AIB allowed €85 per sqft so that’s almost €200,000 to build house & garage. If we didn’t build the garage they wouldn’t have given us €200k.
Our incomes would have allowed us to get substantially more of a mortgage but you have to build a bigger house to get more initially.

Thats just not true. 85 per square foot wouldnt build much these days either.

You can get a lot on donedeal/adverts. We picked up a lot of furniture that way.

enricoh

Garage is built before the house? Kinda getting the cart before the horse.
Can u convert garage to habitable space for a year or two for ye. Or even rent it out under rent a room scheme, u can get 14k a year tax free

Water John

Lot of people build garage before the house. Used as a canteen and store tools. ESB meter in the wall.

Victor

enricoh wrote: »

Can u convert garage to habitable space for a year or two for ye. Or even rent it out under rent a room scheme, u can get 14k a year tax free

Not if the garage is detached.

Trasna1

Water John wrote: »

Lot of people build garage before the house. Used as a canteen and store tools. ESB meter in the wall.

This is true. That said the big issue was in the ground here so it would have been apparent they're was something major up when the machines rolled on site. Again it's easy for me to say (as a former professional in the field) that this is the point that the garage should have been jettisoned. However it's built now so I'd be looking at doing the absolute bare minimum to it - make it weather tight and no more. No internal plastering, no ceiling and no wiring other than a light and maybe a socket.

So that others may learn, the best €1000 you will ever spend when doing a new build is getting a comprehensive site investigation done. It saves so much heartache down the line. Some people find it hard to pay it especially when it finds benign ground, but it's true value is when it finds the unexpected. And I guess it's yet another professional fee on top of all the bcar stuff.

To return to your question OP, since you're not already at your limit mortgage wise id expect ordinarily you'd be able to get further finance. That said, you did say that you would find it hard to service an additional CU loan on top, so really trimming what doesn't need to be done now with the smallest amount of further finance is the best course of action. Get it to weather tight is the major goal then make the minimum of spaces livable as your budget.allows

Iodine1

Last insurance quote for rebuilding I got was €135 sq ft a few years ago and that's on a developed site, water and services etc already in place. Driveways, fencing, gardens etc are rarely/never included in estimates either.

newmammy2011

Cailin1234 wrote: »

Garage is built. AIB allowed €85 per sqft so that’s almost €200,000 to build house & garage. If we didn’t build the garage they wouldn’t have given us €200k.
Our incomes would have allowed us to get substantially more of a mortgage but you have to build a bigger house to get more initially. So I’m hoping they’ll give us more now in some form of top up. Waiting on a phone call from the mortgage advisor.

hi,
Im going through a self build with an aib mortgage at the moment.
Did you fill out the self build costings template when you were applying for the mortgage?
Also when the aib appointed valuer came out to value the site, they would have given a projected final valuation based on the site and plans to the bank. Assuming this valuation is higher than you projected final cost and assuming your income allows, you shouldnt have a problem getting a top up on mortgage to complete.....altho i think theres pretty much the same amount of paperwork involved as the initial mortgage application. Same 80% maximum loan will apply

mickdw

I think you are misunderstanding the 85 /Sq ft.
As far as I'm aware, that is the very minimum figure they will need to see to allow them to proceed. Any less is considered unrealistic. So to say that you would have had to build a bigger house to get more mortgage doesn't make sense to me unless the property values are very poor in the area and the final valuation was very close to mortgage figure.

Don't go into bank saying you have run out and are stuck. Your engineer will want a get out clause as he will have signed at the start that the budget is realistic so he will likely take the angle now that you are going for a higher spec fit out and need the additional funds.
Personally,
I'd get the building regulation compliance items done and pull right back on the fit out. So get the solar etc fitted out, heat recovery system up and running if you have it etc. Then do bare minimum to move in. Operate out of utility as a kitchen if you must, basic bathroom fit out is cheap as hell. Minimum number of bedrooms and a living area.

Victor

Cailin1234 wrote: »

€200,000 mortgage with AIB. 1900sqft house with 420sqft garage.

You don't say how much of your own money you have spent, but that seems like inadequate funding from the start.

Have €100,000 of mortgage left to draw down but that will only pay the contractor.

What do you have in fixed prices from the builder and what if make it up as you go along?

Site needed a lot of digger work & stones etc so little change out of €20,000 there. ... The least I’m thinking we’ll need is €40,000 which is a bit much of a credit union loan! I doubt we could afford to pay that plus our mortgage.

How did €20,000 turn into €40,000?

Trasna1 wrote: »

That said, you did say that you would find it hard to service an additional CU loan on top

Paying a short-term loan like a credit union loan requires higher monthly payments (but likely lower overall cost of borrowing) than borrowing the same capital in a long-term mortgage.

BarryD2

enricoh wrote: »

Garage is built before the house? Kinda getting the cart before the horse.
Can u convert garage to habitable space for a year or two for ye. Or even rent it out under rent a room scheme, u can get 14k a year tax free

If garage is 420 sq ft, that is a fairly large garage. We bought a 2up/ 2 down house that was c 500 sq ft and lived in it with 3 children for 8 years before saving and extending to 1500 sq ft. That's self build

99nsr125

Cailin1234 wrote: »

Hi

Just wondering what other people have done in our situation. We are in the process of building a house. First time buyers. €200,000 mortgage with AIB. 1900sqft house with 420sqft garage. I have an excel file that I’ve been using to keep track of costs so I know that we don’t have enough money to finish the house. Have €100,000 of mortgage left to draw down but that will only pay the contractor. So kitchen, sanitary wear, heating, furniture & all these “extras” we didn’t know about, we have no money for. We ran into issues at the start with the site. Site needed a lot of digger work & stones etc so little change out of €20,000 there. Plus due to new building regs you can’t just stick an oil boiler & a few rads in anymore. It’s either that plus solar panels or a heat pump. More expense!
Been problem after problem after that & every problem was thousands to sort. We have spent quite a bit of our own money too but have nothing left now.

Is there such thing as a top up mortgage now? Or can you remortgage? I’m waiting on the bank to get back to me but would be good if I had an idea of options before that.

The least I’m thinking we’ll need is €40,000 which is a bit much of a credit union loan! I doubt we could afford to pay that plus our mortgage.

Any ideas what options there are for us?
I’ve already downsized the spending as much as possible.

Thanks

It shoulda been 120 per square foot ex the garage, you never had enough.

Defer the garage
Defer landscaping
Make house weathertight
Finish habital rooms
Kitchen
Bathroom
Bedroom and
Living room

Then finish room by room

I apologise if I sounded harsh

Professionals are sometimes nowhere near, several people in the chain appear to have been anything but realistic in their advice

Iodine1

It is a very difficult position, as it is certainly too late to downsize. However agree with above, just do essentials and take time to do the rest. There are very little options and no easy solutions. Best wishes.