Compare Flexible Loans For Self Build Mortgages

Compare Flexible Loans For Self Build Mortgages



Compare Flexible Loans For Self Build Mortgages
Home buyers who want to​ build a​ property for themselves or​ for investment purposes,​ can find it​ a​ challenge to​ compare flexible loans that will offer them the​ best deal as​ there are many variables .​
a​ loan for building a​ home is​ called a​ ‘self build mortgage,​’ and there are several different types of​ self build mortgages available in​ the​ market place.
Differences between a​ Self Build Mortgage and a​ Traditional Mortgage
To compare flexible loans for a​ self build,​ the​ differences between a​ self build mortgage and a​ traditional mortgage first needs to​ be understood .​
The main difference is​ that self build mortgage money is​ released in​ stages as​ the​ building progresses,​ rather than as​ a​ single amount .​
The success of​ the​ loan application is​ not entirely dependent on​ financial circumstances,​ as​ with a​ traditional mortgage,​ but also on​ the​ quality and credibility of​ the​ presentation .​
Mortgage lenders will want to​ ensure the​ project is​ properly planned and produced by suitably qualified professionals .​
They will use the​ plans to​ assess the​ value of​ your plot of​ land and the​ end-value of​ your self build scheme .​
a​ thorough cost analysis needs to​ be made along with an​ itemized budget .​
They will also take into account your enthusiasm,​ experience,​ confidence in​ completing the​ building within the​ timescale laid out,​ and the​ reasons why you​ want to​ do a​ self build.
Currently there aren’t any self build loans for 100% of​ the​ entire project cost .​
They range from 50 -80% of​ the​ land value,​ and therefore you​ require some capital to​ begin with .​
There are 2 methods by which the​ money can be released during the​ build: at​ the​ end of​ each stage,​ known as​ arrears stage payment,​ or​ at​ the​ start of​ each stage,​ known as​ advance stage payments .​
The advance stage payment mortgage is​ more popular as​ it​ gives a​ positive cash flow during the​ building process.
Before you​ compare flexible loans,​ have a​ carefully drafted expense plan so you​ know exactly how much you​ need to​ borrow,​ and aim to​ acquire a​ flexible loan with the​ lowest percentage of​ interest,​ with payments over the​ shortest practical period.
Important Factors to​ Consider When you​ Compare Flexible Loans
There isn’t an​ easy way to​ compare flexible loans for a​ self build mortgage because there are so many factors to​ consider,​ and what may be suitable for one homebuyer may not be suitable for another homebuyer .​
However,​ the​ important factors to​ consider when you​ compare flexible loans for your self build mortgage are:
What is​ the​ maximum loan-to-value (LTV) available?
Who will assess the​ valuation of​ the​ land and property? How much will it​ cost?
Are the​ staged payments made in​ advance or​ in​ arrears of​ each stage?
Will you​ need planning permission in​ a​ detailed or​ a​ summarized format as​ a​ condition of​ an​ advance loan?
Are there charges for multiple inspections and valuation surveys before funds are released?
Is the​ lender flexible if​ you​ have to​ alter the​ design of​ your self-build home?
Do you​ need a​ warranty or​ another type of​ structural insurance? Most lenders also require site insurance to​ protect against damage caused to​ the​ building during construction and theft of​ materials.
Are there any early termination/completion/redemption fees?
Can you​ manage you​ own construction or​ does the​ lender stipulate you​ must have an​ architect or​ a​ project manager for the​ build?
What construction conditions are attached to​ the​ loan?
Conclusion
There are many variables with a​ self build mortgage and as​ there is​ no quick way to​ compare flexible loans for your needs,​ an​ independent mortgage broker can guide you​ to​ the​ right flexible loan for your needs.




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