Need a mortgage on a building site

[Nosha123]

Does anyone know if a Bank will be hugely put off lending me some money to finish building our house - which up until now we have done ourselves with little borrowing?
There is a dwelling on site (a timber summerhouse) which we live in. (one bed with kitchenette) and there is plenty of equity in the plot and building site.
Will they be put off completely or are they likely to insist we get a bit further before lending. Currently the basement is done and the roof timbers are about to go in (so no roof and no windows) Advice appreciated!

[vibrasphere]

Yes, you can borow on a self build, it is common, go see some.

[sandmaster]

The banks may well lend to you but they need to ensure you will be able to repay. Guidelines are rigid and at your present stage you may not get more than half the site value. This may increase when you reach roof level.

[Nosha123]

Our affordability has already been approved for the mortgage (not a bank loan). And I said it was for home improvements (which it is!) but I didnt say that we knocked the original house down and rebuilt it! Plot has plenty of equity versus the loan - even as a half built house. Am I right in thinking they could say one of the following:
� no we are not happy to lend. Full Stop
� we will lend you the money but only if you can get roof on and windows in so its 'habitable
� we are happy to lend you the money but not all of it at this stage

We cant go down the self build mortgage route I dont think as we started building 7 months ago - so not involved them from the outset. Cant imagine they would lend half way thru a project.
I just know banks a re a bit twitchy at the momemt so not sure what the outcome is likely to be.
Parents have agreed to lend us some money to get it more finished then go to the bank in a few months and pay them back

[vibrasphere]

the property will be assessed by a surveyor and the plot valued (cost of land + value of property as it is) the surveyor gives a "when finished val" this is what your loan to value is based on.

Usually the lender agrees to release tranches of the loan at specfic points in the build, the fact that they were not involved does not mean you cannot borrow, go see the Cheshire building society i used to administer self builds for them so i know its viable.

You must have proper permission etc - usually the value of self build far outstrips the build cost making it an attractive security.

[vibrasphere]

Release points are at

foundations laid

Shell

Roof on

Finishing

or something like that.

[Nosha123]

thank you everyone! I am more clear in my mind now - and have justified that there is a solution out there - I just need to find it!
Banks still afterall need to be lending money - I just need to find the one who will lend it to me!

Wish me luck!

Thanks again

[EverClean]

Sounds like Buildstore is your answer.

www.buildstore.co.uk

A bank would do it's nut if you told them it's for home improvements and they found it demolished and part rebuilt. They are lending you on the security. If you stop paying then the rpossess the home and sell it on to cover their lending. An unfinished property will put their ability
to sell on at the best price at risk.