Self Build Advances

As part of the self build finance the lender usually gives self build advances to you in five steps. This is in order to stop cash flow being a problem. As you might have guessed, you need to plan carefully the costs that you may incur in building the house.

There are three basic choices of paying interest, namely Variable rate, where the rate can go up or down, fixed rate, where the rate is fixed for a pre-determined period, and capped, where the monthly payments have a maximum for a guaranteed period.

You won't get the mortgage unless you've done this anyway, but your installments might not be sufficient if you have underestimated your costs or suddenly need to buy new materials. When you get a quote, you should make sure it includes all labour, materials and the job duration and include VAT. The quote should tell you if the price is firm or subject to additional charges.

Detailed plans must be prepared showing all constructional details and should be submitted well in advance of commencement of work on site. There is a fee involved and the local authority must pass or reject your plans within a certain time limit or they may, with your agreement, add conditions to their approval.

Lending will generally be between 75 - 95 percent of the cost of the build. Some lenders allow for a separate loan for the building plot of land.