The main difference between a self-build mortgage and a house purchase mortgage is that with a self-build mortgage, money is released in stages as the build progresses, rather than as a single amount.
Some lenders will lend you money to purchase land, typically 75% of the purchase price or value, which ever is lowest.
During the build you can borrow typically 75% of the cost of the value of the house as the project progresses, depending on the chosen lender.
There are two methods by which the money can be released during the build, known as arrears stage payments and advance stage payments respectively.
In the arrears stage payment method, the money is released after the stage has been completed and a valuer has visited the site; this can cause cash flow difficulties.
BuildStore developed the advance stage payment method, so that the money required is released, at the start of the stage before work begins.
This advance payment mortgage has become very popular, as it gives positive cash flow during the build.
Also the high percentage lending of 95% of the cost of the build with BuildStoreâ€™s Accelerator Self Build Mortgage, makes it is easier to stay in your current house, while the build progresses.
You can borrow up to 95% of land costs, up to 95% of build costs and up to 95% of the end value of your new home
To give self-builders the sort of choice available to house purchasers, a range of different mortgages are available through the Accelerator Self Build Mortgage.
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