Common myths when it comes to financing self builds

When speaking with potential clients, we’re often surprised at the misconceptions that continue to circulate around financing a self-build project. To help provide some clarity on this crucial part of your self-build journey, we enlisted the help of finance expert, Thomas McSherry from BuildStore Mortgage Services to explain fact from fiction.

At BuildStore Mortgage Services, we’ve helped over 30,000 thousand self-builders make their dream home a reality, and we hear the same myths time and again. So, let’s set the record straight on some of the big ones…

Myth 1: You need to fund the whole build yourself upfront?

False.
Many people think they need hundreds of thousands in the bank before they can even start. The reality? With a Buildstore self-build mortgage, you can borrow up to 95% of the land and build costs, with funds released at key stages.

• Top Tip: At BuildStore, we offer advance stage payments, giving you money before each build phase starts ideal when working with offsite manufactured building systems.

Myth 2: You can’t get a mortgage unless you already own land

Not true.
In fact, many self-build mortgages allow you to include the land purchase as part of your funding. You can borrow to buy the plot and then continue to draw down funds as the build progresses.

• Top Tip: Speak to us early — we’ll calculate what you can borrow before you commit to a plot.

Myth 3: Self build mortgages are hard to get

Nope.
Yes, they’re different from standard mortgages but they’re not riskier. BuildStore Mortgage Services have access to all lenders and products in the market with exclusive access to over 70 mortgages. In fact, with careful planning, a self-build can be more cost-effective than buying a comparable home on the market.

• Top Tip: We can help you create a detailed cost breakdown and cashflow forecast, so your mortgage is structured correctly from day one.

Myth 4: You can only get stage payments after the work is done

That’s only true with some lenders.
Some self-build lenders offer only arrears stage payments, meaning you have to pay upfront and claim money back later and require the value of the site to increase before you receive funds.

• Top Tip: BuildStore’s exclusive products offer advance stage payments, giving you the funds before each stage begins essential for cashflow confidence.

Myth 5: You can’t build with timber frame or SIPs

Not with us!
All of our lending partners support offsite manufactured systems like timber frame, SIPs or ICF.

• Top Tip: We work with lenders who support all popular construction systems, and we tailor your finance to suit the speed and structure of your chosen method. Make sure you are dealing with a true industry specialist when sourcing the right mortgage. Make sure they have access to all lenders and products and importantly have access to guaranteed stage payments in arrears and advance.

Financing your self-build doesn’t have to be complicated and it’s far more achievable than many people realise. The key is getting the right advice from the right experts, at the right time. For more information, download our Homebuilding Finance for Frame Technologies with BuildStore brochure or speak with the team at BuildStore.

Tom McSherry is National Business Development Manager at BuildStore Mortgage Services.

For more information, visit: Mortgages | Self Build Finance | Homebuilding Finance | BuildStore