# Theoritical question, building your own home



## bidderman1969 (Oct 20, 2006)

say i knew someone well who had a bit of land, and i offered say 100K for it on the basis of i get the planning permission, friends within the building industry to help out, etc etc, then when its all complete, get a mortgage on the end result?

say the house would be worth 250K could i get a mortgage for say 150K to the pay the land owner, then the people that built it with me? (the friends within the building industry)

can that theoretically be done?


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## R7KY D (Feb 16, 2010)

Why so complicated ?

Get the money , Buy the land , build the house


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## bidderman1969 (Oct 20, 2006)

its getting the money beforehand, i was hoping to get the money on the finished product, not jump through hoops to get it, with self builds they release money in stages i think


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## Rayner (Aug 16, 2012)

Yeah they release the money in stages.

So you want the money before buying the land or after the house is finished? If finished that would be easy I'd of thought as there is something for them to take if you don't keep up payments but if they see a grassy field there's nothing for them to take so I doubt they will lend as there's soooo many things that could go wrong.


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## shl-kelso (Dec 27, 2012)

You'll need to look at the stage-release mortgages but be prepared for needing much bigger deposits, having to pay much higher interest rates. You also need the cashflow to fund the build upto the next stage completion where you need an inspection certificate from Building Control or your structural warranty provider before your lender releases payment. 

Look out for the self-build magazines in the news agents and you'll find a number of specialist mortgage/finance providers advertising.

You'll not get a conventional mortgage until the house is fully completed and has a local authority building completion certificate.

I built about 7 years ago, and back then one of the providers offered stage payments in advance providing you paid a substatantial fee (which bought protection for the lender in case you defaulted). It was called the Accelerator Mortgage from BuildStore, not sure of this kind of product is still available following the credit crunch though.


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## Derekh929 (Aug 28, 2011)

So are you saying the guy won't want his money for land till house built?
You will need to make the architect that sign's of the build at each stage has got the correct insurance and is approved with the likely lender or house would be worth a lot less that you thought.
Stage Release mortgages well when you can find a lender to do this let me know as most have pulled out of market long ago and the ones that are left will put you through he mill , asking endless stuff, if you can fund it till fully built , then if affordable then could re mortgage if all owned by you, subject to being approved then.
I think you would need to buy the land after full planning though outright


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## bidderman1969 (Oct 20, 2006)

Well I know people with land (very well) and I know all the right people, yes including architect, again very well through all the years I was in the building industry and old building renovation, so it's possible I could do it, hence why it's a theoretical question


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## Derekh929 (Aug 28, 2011)

bidderman1969 said:


> Well I know people with land (very well) and I know all the right people, yes including architect, again very well through all the years I was in the building industry and old building renovation, so it's possible I could do it, hence why it's a theoretical question


But I lender would not allow you to borrow unless ownership transferred to you , and architect would still need to be approved by lender, do your homework and make sure you look on build store website for self build info


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## bidderman1969 (Oct 20, 2006)

Oh definaty will do, as I said before, it's all theoretical


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