Self Build Mortgage

A self build mortgage is now fairly easy to arrange and the money is generally lent in stages. Some lenders will lend perhaps 75% of the cost of the land and then release the money in stages accordingly. There are two ways in which the money can be released during a build, either pre paid or post paid payments.

The post paid or arrears stage payment method has generally been the traditional way of financing a self build mortgage. Money is released after each stage has been completed and checked off by the valuer which can cause cash flow problems to the self builder. The pre paid or advance stage payment method was developed by Buildstore and allows for money to be released at the beginning of each stage which means positive cashflow, which in turn means because the money will always be there in advance, there should never be any cash flow problems.

'The Accelerator Mortgage' provides for a loan of 95% at each stage: so 95% of the money for the land is available, 95% for the next stage and so on, all paid in advance. This method of financing is simply outstanding. What it means to the self builder is that there is now no hindrance to getting on with the build (apart from planning permission ) as far as the money is concerned. What is needed after this, is the land and then to decide on the energy efficiency , the designs, cost of building materials and the luxuries!

So, if you want to live in a home that's worth £300k, it'll cost you £200k overall, and you'll ony need £10k to put down overall. I guess the deposit may change Depending on how quickly the project happens - say a year or so and then you'd be making 1000% return on your money, and have a home that you really want to live in!

The real beauty of the Accelerator mortgage is that you can stay in your own home whilst building your next one, so forget about living in a caravan as the Accelerator mortgage is designed to run that way.

It is now at this stage, that people can decide on the type of size, and specification of home that they want to build and if they have not already found a plot of land to build on, then there is a further solution here.

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