Financing your build

Finance is key to the success of your project and a good cash flow at each stage is essential.

How to finance your build

For most people, getting their finances in order is an important starting point for their self build project. If you need to borrow money, then finding the right mortgage is crucial to ensuring the success of your project.

A mortgage for a self build differs from one you would use to buy a house because with a self build mortgage the money is released in stages as the build progresses. There are various factors which will affect your ability to borrow including income and disposable earnings, credit history, employment history, loan to value required, and elements of the project itself. In terms of finance options, self build mortgages are designed to release some funds for the purchase of the land, and the rest of the money is then released in stages as building work progresses.

There are two types of self build stage payment mortgages available – arrears and advance. With an advance stage payment mortgage, available exclusively from BuildStore and known as Accelerator, it is possible to borrow up to 90% for the land with just outline planning permission. Some lenders will only lend with detailed planning permission which can take months to arrange and may restrict the plot opportunities you have. An advance stage payment mortgage makes buying at auction a possibility and speeds up the process of acquiring a plot, while also reducing the deposit required. Further funds are released for the build costs – again up to 90% and money is released ahead of each build stage.

Mortgages are more complex to arrange nowadays with tighter criteria, and not all lenders will fund the land purchase stage. There are many different ways in which the money can be released, depending on your own particular circumstances, so this is why we recommend that you speak to a self build finance expert to evaluate your options as early in your project as possible.