Have you always wanted to build your own home? Contractor Mortgages Made Easy can help to make this dream a reality, with a self-build mortgage.
January 2015 saw a new scheme launch which enables contractors to build or customise their homes within the UK. The scheme, known as ‘The Custom and Self Build Scheme’ (CSB), has been launched by Lloyds Banking Group and Capita Asset Services. In the past, people have struggled to access a mortgage when their wish was to build their own home. Self-build property was also viewed as an option for the high net-worth minority previously, however this is not the case and self-build contractor mortgages are now accessible for all contracting professions. The new CSB scheme is making self-build mortgages more accessible than ever before.
How does a contractor self-build work?
Self-build contractor mortgages work differently to any normal house purchase. With a normal house purchase the lender will release the cash up front, however with a self-build contractor mortgage, the lender will release the monies in stages to help fund the building and construction of the new build. The key stages of when a lender will release monies:
- Completion of the foundations and the groundwork for the new property
- On completion of the walls and brickwork
- Once the roof has been put on
- When the property has been made wind and watertight
- First fix of cabling and pipes, plastering of the internal walls and ceiling
- Completion of the second fix which includes fixtures and fittings, bathrooms and kitchen
- Completion of the build
As a contractor you will typically need a deposit of at least 30-35%. The chosen lender will then lend 65-70% of the plot value; however the lender will more than likely expect you to have any relevant permission in place before you approach them and see detailed plans. The lender will also expect to see professional builders and contractors being hired, rather than you doing the work yourself. As a contingency, it may be a good idea to budget an extra 10% to cover the cost of any unanticipated expenses.
As a contractor, your contract rate on its own will be enough for you to qualify for a mortgage. Self-build mortgages for contractors are available in a variety of forms and also apply to commercial properties, uninhabitable buildings and any property that could be turned into a residential home.
Step by step how to build your own home:
- Finding land that is suitable to build on
- Ensuring you have enough funds to build a property
- Have you got planning permission and registered your land?
- Have you spoken with Architects and had your home designed?
- Have you hired the right contractors and builders to fulfil the work?
- Have you thought about how you could make your home sustainable?
- You may need to start thinking about other professional that you will need to hire, for example a plumber, painter and decorator, electrician etc.
Once you have made it through this process your new home should be complete!
To find out more about the self-build mortgage options that are available for contractors, please contact us today by clicking here or call directly on .