Every self builder needs funding in place to drive their build through the various building stages and this is often in the form of a mortgage. Mortgages for self builders differ to those offered for a standard house purchase; this is because the money is released in stages as work progresses rather than all the funding being provided up-front. This can present challenges for self-builders in making sure they have funds available at the right time during their build, particularly for timber frame builds. We’ve spoken to Tom McSherry, Mortgage Adviser at self and custom build specialist mortgage broker, Buildstore Mortgage Services, to find out more about the mortgages developed by Buildstore to solve these problems
What does BuildStore offer to the self build market?
Self builders are unable to borrow funds using a traditional mortgage from a high street lender. BuildStore offers a specialist approach and uses a panel of exclusive lenders, consisting largely of regional Building Societies, to offer funding for self build projects. BuildStore has access to around 50 specialist mortgage products from 13 lenders, all specifically designed for those looking to build or renovate their home.
How can I get a self build mortgage for my timber frame house?
Buildstore has designed the advance stage payment mortgage, which provides funds based on the cost of each stage of work before that stage has started. This means that rather than clients having to wait for work to be completed to get the money, self builders can get the funding upfront. It also means that clients aren’t subject to lender valuations at each stage of the build, which could mean them getting less money than they expect if the plot isn’t valued high enough. This provides the self builder with peace of mind that funds will be provided as and when required, throughout the homebuilding project, and is especially helpful for timber frame as there can be significant costs at the onset.
Timber frame is an off-site manufactured building system and it needs to be paid for in full before leaving the factory. This is when a cost-based mortgage comes in handy because it ensures the self builder will have the cash required to meet Frame Technologies’ payment terms. To put it simply, with BuildStore’s cost-based advance stage payment mortgages, the money is made available before the timber frame is delivered on site and building commences.
How has the pandemic affected self build mortgages?
Unfortunately, some people’s line of work was impacted during the pandemic. Lenders have kept an open mind and have remained positive throughout the past 18 months, and are making adjustments where possible. For example, lenders are using 2019 and 2021 incomes and omitting 2020 in some instances. This is proving to be very helpful for those people whose income was affected by the pandemic and means the dream of building their own home can still be achieved.
In the past six months, there has been an increase in the cost of building materials. These unanticipated costs were not factored into mortgages and there have been some hurdles to overcome with income vs costs as costs have, in some cases, significantly increased. Luckily, most budgets do have a significant contingency built in to account for materials increases.
What’s one piece of advice you would give to someone setting out on the self build journey?
One piece of advice I always give to my clients is to speak to a special self build mortgage advisor as early into the self build process as possible. Sometimes architects can include unique and impressive elements in their designs that, on the practical side of things, would not be admissible as part of a mortgage offer. Rather than get your heart set on drawings that later need to be changed, speaking to a mortgage advisor early on can help create a smoother process.
For more information about BuildStore mortgages, visit buildstore.co.uk. To speak to us about using Frame Technologies for your timber frame self build project, get in touch on 01544 267 124 or firstname.lastname@example.org.