If you are building your own home you can take out a self-build mortgage to finance the cost of the build. As a general rule, you will need to put down a deposit of at least 25 per cent, although you might be required to put down as much as 50 per cent depending on your situation. Lenders will often charge you higher interest rates for self-build mortgages as they are seen as slightly more risky than ordinary mortgages.
It is important to consider all costs involved in build your own home including planning permission, builder and architect fees, legal fees, and insurance in case of any unexpected problems such as delays. You would be wise to add into your budget a sensible contingency fund to allow for unforeseen problems or changes that manifest during the building process.
Getting expert advice from a financial adviser can help you to prepare and plan financially prior to the build and advise you on other issues including insurance, while a mortgage adviser will be able to find a suitable mortgage for you.
Questions you might like to ask a financial adviser or mortgage adviser…
- Is there a specific type of insurance I need?
- Will I need to put down any type of deposit?
- How many instalments will the money be paid in?
- What documentation for the planned house will the lender want to see?