Self Build Mortgages

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From Planning to Financing: Everything You Need to Know About Self Build Mortgages

Building your dream home is an exciting prospect. It gives you the opportunity to create a home that suits your style, preferences and family's needs. However, building a home can be an expensive undertaking, especially if you don't have the finances upfront. This is where self-build mortgages come in handy. In this guide, we'll cover everything you need to know about self-build mortgages in Northern Ireland. So, let's get started!


What are self-build mortgages?

Self-build mortgages are loans designed to help you finance the construction of your own home. Unlike traditional mortgages, self-build mortgages are released in stages as the building work progresses. This means you only pay interest on the money you have received, which can help keep your costs down. Self-build mortgages Northern Ireland can be used for a range of building projects, from building a home from scratch to renovating an existing property.


YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

How do self-build mortgages work?

If you're considering a self-build and need a mortgage, here's how the process works:


Planning: Before you can apply for a self-build mortgage, you'll need to have a detailed plan of your building project. This should include your budget, building plans and planning permission.


Deposit: Self-build mortgages usually require a larger deposit than traditional mortgages. Typically, lenders require a minimum of 25% deposit to secure the loan.


Release of funds: Unlike traditional mortgages, self-build mortgages release funds in stages as the construction work progresses. The lender will send out a surveyor to check the progress of the build before releasing each stage of funds.


Interest: With selfbuild mortgages, you only pay interest on the money you have received, which can help keep your costs down.


Final payment: Once the building work is complete, you'll need to make a final payment to settle the mortgage. This can be done through the sale of your previous property, savings or by refinancing the mortgage.


An earlier stage might be site purchase, although worth noting that most lenders prefer if the borrower already owns the site to be built out on. However, options do exist for those who wish to borrow to assist with the purchase of the site too.

Ready to take the next step?

What are the eligibility criteria for self-build mortgages?

To be eligible for a selfbuild mortgage, you'll need to meet the following criteria:


  1. Good credit history: Lenders will check your credit history to assess your risk as a borrower. A good credit history will improve your chances of being approved
  2. Stable income: Lenders will want to see evidence of a stable income to ensure you can afford to repay the mortgage.
  3. Adequate deposit: Self-build mortgages usually require a larger deposit than traditional mortgages. You'll need to have a minimum of 25% deposit to secure the loan.
  4. Detailed plan: You'll need to have a detailed plan of your building project, including your budget and building plans.
  5. Planning permission: You'll need to obtain planning permission before you start building.


The risks and rewards of building your own home

Self-build mortgages offer a range of benefits, including:

Customisation: Self-build mortgages allow you to create a home that suits your style, preferences and family's needs.


Lower costs: With self-build mortgages, you only pay interest on the money you have received, which can help keep your costs down.


Higher value: Self-build homes tend to have a higher value than pre-existing homes, which can

make them a good investment in the long run.


Quality control: When you build your own home, you have control over the quality of the materials and workmanship used in the construction process.


Energy efficiency: Building your own home gives you the opportunity to incorporate energy-efficient features that can help reduce your energy bills.

Planning and due diligence

While self-build mortgages present certain disadvantages, these can be overcome with thorough planning and due diligence:


Elevated risk: Constructing your own house inherently carries a degree of risk compared to purchasing a pre-existing property. However, meticulous budgeting and contingency planning can help mitigate unforeseen expenses and construction delays.


Time investment: The process of crafting your bespoke residence may indeed demand significant time and dedication. But remember, this allows you to create a truly personalised space that reflects your individual taste and preferences.


Restricted choices: Securing an ideal plot of land in a sought-after location can prove challenging, potentially constraining your options. Nevertheless, exploring alternative areas and remaining open to creative solutions can ultimately lead to the realisation of your dream home.

We’ll help you apply for your  mortgage & guide you to the finish line

A self-build, custom build or conversion is more complicated than a regular purchase. At NJW Financial we understand how Self Build Mortgages work.


NJW understands the importance of cash flow and will help you ensure that your project is funded on time. We know the importance that lenders attach to certain areas such as the location of the plot, affordability and construction method.


To discuss a project, please call, email, or book a phone appointment via the website with an advisor.

Need Help? 

Frequently Asked Questions

  • Is it difficult to obtain a mortgage for self-build?

    Lenders consider them to be a greater risk, so fees and interest rates are often higher. They are only offered by a handful of lenders, which means there is less competition to offer lower rates. Other costs such as planning permission or buying a plot will also need to be considered before you can obtain a mortgage.

  • If I own the land, can I get a mortgage to self-build?

    If I own land, is a self-build mortgage possible? This question can be answered in a few words: Yes it is!

  • Are first-time buyers allowed to build their own house?

    First-time buyers can get a self-build mortgage. Yes! Yes! Lenders are more cautious with first-time buyers than usual, especially if it is a self-build project but it can be done.

  • What level of deposit do I require to get a self-build mortgage?

    Typical deposits will be a minimum of 20 -25%. Generally, if you already own the land, that is considered your deposit.

Ready to get started?

We’d love to hear from you.  Call 02895 575010 or 0141 291 5044 or send us a message using the form below and we’ll tend to your enquiry right away.