A self-build mortgage is a loan you take out to fund a property you are building/designing yourself. The main difference from a standard residential mortgage is that you receive the funds in stages, as the build progress’s, with the final stage being paid upon completion.
Building your own home could potentially save you thousands, particularly if you already own land and have planning permission. Building work is exempt from stamp duty, as is the value of the finished house. That means you will only have to pay duty on the value of the land itself if it exceeds £125,000, which is likely to be far lower than the value of the completed property.
Only a limited number of lenders offer self-build mortgages. The qualifying requirements will often differ between lenders, but most will specify whether the completed house can be used for residential or commercial purposes. It is possible for first-time buyers/first time builders to get a self-build mortgage too. Having a larger deposit of between 25- 40 per cent, a good credit history and proof of reliable income will be crucial. Lenders are more cautious when it comes to self-build projects, so getting our expert advice and guidance is crucial for this type of project.