A question of money: How to get the right mortgage provider for you?
Question: My daughter and son-in-law are having difficulty in finding a mortgage provider. They are buying two plots of land on which they intend to build a home.
One plot costs £95,000 and the other £30,000. Both are professionals in good jobs. They are looking for a mortgage of about £80,000 to complete the purchase of the more expensive site. They have planning permission on the property, which lapses in 18 months.
The only mortgage offer they have is from a building society that requires planning permission to last at least five years. Can you suggest an alternative mortgage provider?
Answer: Ray Boulger, senior technical manager at mortgage brokers John Charcol, says: “I am puzzled by the restriction from the building society.
“What I would expect the lender to do is to include a condition in the mortgage offer that building work must be commenced by the 18 month deadline.
“That would automatically mean the offer lapsed when the planning permission did. If your reader's application to the lender did not make it clear that funds are not required to purchase the land it may be able to reconsider.
“One building society which specialises in self build is The Ecology, and they do lend in Northern Ireland.
“The Progressive Building Society and Bank of Ireland (NI) will also consider self -build applications.
“In addition, I would suggest contacting Build Store, which is not a lender but a company specialising in the self-build market. It has special deals with several lenders, all of which allow funds to be drawn down at the various stages in the build process without the normal requirement to have a reinspection (valuation) done each time, which saves time and money.”