Finance Self Build

To fulfill your dream of self build, arranging for finance self build holds the key. When seeking self build finance, the key elements to consider are the manner of the lending and any conditions of their lending.

These two need to be considered carefully to avoid possible financial hardship and cash flow difficulties. There are different types of mortgage options. Under Discount mortgages, for a set period, usually one to five years, the lender offers a reduction on its SVR. However much the SVR rises or falls during the discount period, you always pay a rate 1.5 per cent lower. An example of this is that it might offer a discount of say around, 1.5 per cent over three years.

Self-builds tend to save around 30 percent of the value of their finished house by building it themselves, a saving brought about by taking away the profit developers make on most new houses, along with the VAT savings made on materials. Some lenders offer stepped discounts, where the level of the discount decreases after a set period. After the discount period the interest rate will usually revert to the lender's SVR. You may get around 2 percent discount for a year, followed by a 1 per cent discount in year two.

Self-build projects are often completed whilst in partial or full occupation and that “habitable” may be subjective. If you are in any doubt as to your own position, speak to your insurer to discuss your requirements. You will need to insure the project for its Professional Reinstatement Cost (i.e.: the cost to rebuild the property at completion with allowance for site clearance and professional fees).