25 January 2013

Build your 'Dream Home'!

We’re in the midst of a rate price war between lenders vying for new customers.  This is obviously great news for the end consumer, but it can’t be profitably sustainable for these lenders, so make hay whilst the sun shines, as they say!   Just be wary that lenders are ‘cherry picking’.  You may be drawn to a superb rate and approach the lender directly, but for whatever reason, they decline your application and offer you a higher alternative or nothing at all.  We’re hearing numerous differing stories from customers currently, and some are quite disturbing.  Especially if the lender has pulled the plug a number of weeks in to processing..

Don’t get me wrong, we are in a very positive era and enjoying a very busy start to the new year.  However, you need to be aware that these things happen and that they can happen at any time right up to the completion of your mortgage! 

There appears to be a lot of building work going on locally, mainly by large property developers.  In addition, we’re seeing a lot more enquiries for those looking to build their own dream home.  Many have been enquiring about mortgages to buy a property, knock it down and build a new one in the same location.  It can be done and these are normally called Self Build Mortgages.  Others are looking at substantially renovating their existing properties.  Again, this can be done.  Either way, have a chat with a local architect first to see if your plans are realistic possibilities.  They will have a good idea as to what the local Council Planning Officers will accept and of course, what they will reject!   Lenders then may look to lend funds on a stage payment basis.  Stage one might be the foundations, stage two might be ground level and so on.  Each stage would require sign off by the buildings inspector and then funds would be released.  The lender may not lend the full build amount, so be prepared to put in a deposit and possibly at each stage.  For extensions and renovations, it would depend on the size of the work and what funds may be required.   Seek professional advice.

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