The word itself is telling you: one self-builder mortgage It is used to build your own home. That is, as they point out in HelpMyCash“It is used to finance the construction of a house on land that you own.”
And the main difference with conventional mortgages, they explain, is that, instead of giving you the money all at once, they will give it to you in phases, “and you will have to present several special documents during the application process.”
Requirements for a mortgage to build your house
Table of Contents
Table of Contents
To obtain a self-build mortgage, you need to have various documents and licenses. Otherwise, the bank will reject your application and you will not be able to finance the construction of your new home.
These are, according to information from HelpMyCash, the requirements you must meet:
- Certify that you are the owner of the land: you must present the simple registration note, which is a document that will be provided to you at the Property Registry. The plot on which you will build the property must also be classified as urban land and not have any encumbrances.
- Have the construction license: it must be issued by the city council of the municipality in which you want to carry out the work.
- Have a project prepared by an architect: The College of Architects that corresponds to your region will have to validate this project.
- Have an execution budget: the construction company must prepare it for you.
- Have the energy efficiency certificate for your future home: The construction company must deliver it to you during the drafting phase of the execution project.
How does a self-build mortgage work?
A self-builder mortgage is divided into different phases. This is how the experts at the comparison site describe them:
Initial or ground phase
When you sign the mortgage, the bank will give you a percentage of the amount of your loan; normally half. With that money you can pay the construction company to start the work to build your house.
Certification phase
As the work progresses, you will receive more money. Before each payment, the architect in charge of the construction will certify to the bank that the work is progressing as planned.
End of construction phase
When the architect certifies that the building is finished, you will receive a final installment of money (between 10% and 20% of the loan amount) to pay the rest of the bill for the construction company.
Normally, during those two years a capital grace period applies. This means that you will only be charged mortgage interestwhich means you will pay lower installments. In addition, the interest is only calculated on the amount that the bank has given you up to that point.
When the grace period ends, you will start paying normal monthly payments (principal and interest) until the debt is settled. The repayment period for self-build mortgages is usually a maximum of 30 years..
Which banks offer self-build mortgages?
And, also thanks to HelpMyCash, here is the list of banks that offer self-build mortgages:
Bankinter
This entity has two types of self-promoter mortgages. These are their characteristics:
Fixed Rate Credit Chalet
- TIN: 4.9% (bonus, 3.6%).
- APR: 5.37% (bonus, 4.3%).
- Fee: 579 euros (subsidized, 506 euros).
Variable type credit chalet
- TIN: E + 2.05% (bonus, E + 0.75%).
- APR: 5.89% (bonus, 4.82%).
- Fee: 595 euros (subsidized, 520 euros).
Hipotecas.com
Crea-Autopromotor Fixed Rate Mortgage
- TIN: 4,55%.
- TAE: 5,06%.
- Share: 559 euros.
Crea-Self-Promoter Mixed Type Mortgage
- TIN 10 years: 4.55%.
- TIN after: E + 1.29%.
- TAE: 4,92 %.
Crea-Autopromotor Variable Rate Mortgage
- TIN: E + 1.89%.
- TAE: 5,69%.
- Share: 587 euros.
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Tags: Banking, Fixed Rate Mortgage, Home, Mortgages, Money, Trending, Housing, Variable Rate Mortgage
Self build mortgage calculator
The Ultimate Guide to Self-Build Mortgages: Everything You Need to Know
Are you considering building your own home? A self-build mortgage can be a great option to finance your project. In this article, we will delve into the world of self-build mortgages, explaining what they are, how they work, and what requirements you need to meet to obtain one.
What is a Self-Build Mortgage?
A self-build mortgage is a loan taken out to fund the construction of a property, whether it’s a brand new project, a partially built project, or a conversion [1[1[1[1[1[1[1[1]. It’s an attractive option for those who want to build their dream home, but need financial assistance to do so.
How Does a Self-Build Mortgage Work?
Unlike traditional mortgages, self-build mortgages are released in stages, rather than in a single lump sum [2[2[2[2[2[2[2[2]. The lender will typically release funds in three phases:
- Initial or Ground Phase: The lender provides an initial payment, usually 50% of the loan amount, to cover the initial construction costs.
- Certification Phase: As the construction progresses, the lender releases further funds, usually in stages, upon receipt of certification from the architect that the work is progressing as planned.
- End of Construction Phase: Once the property is complete, the lender releases the final installment, usually 10% to 20% of the loan amount, to cover any outstanding construction costs.
Requirements for a Self-Build Mortgage
To qualify for a self-build mortgage, you’ll need to meet certain requirements, including:
- Certifying Ownership of the Land: You must provide proof of ownership, usually through a simple registration note from the Property Registry.
- Construction License: You need to obtain a construction license from the local authorities where the property is located.
- Project Prepared by an Architect: The College of Architects must validate the project plans prepared by an architect.
- Execution Budget: The construction company must provide a detailed execution budget for the project.
- Energy Efficiency Certificate: The construction company must provide an energy efficiency certificate for your future home during the drafting phase of the execution project.
Which Banks Offer Self-Build Mortgages?
Several banks offer self-build mortgages, including Bankinter, which offers two types of self-promoter mortgages with varying interest rates and fees.
Conclusion
A self-build mortgage can be a great way to finance your dream home, but it’s essential to understand the process, requirements, and benefits involved. By doing your research and choosing the right lender, you can turn your dream into a reality.
References:
[1] Suffolk Building Society. (n.d.). Self Build Mortgages. Retrieved from
[2] MoneySuperMarket. (n.d.). Self-Build Mortgage. Retrieved from
[3] Unbiased. (2024, March 6). What is a self-build mortgage and can I get one? Retrieved from
Self build mortgage calculator
The Ultimate Guide to Self-Build Mortgages: Everything You Need to Know
Are you considering building your dream home? A self-build mortgage can be a great option to finance your project. In this article, we will dive into the world of self-build mortgages, exploring the requirements, how they work, and which banks offer them.
Requirements for a Self-Build Mortgage
To obtain a self-build mortgage, you need to have various documents and licenses. Otherwise, the bank will reject your application and you will not be able to finance the construction of your new home. According to HelpMyCash, the requirements you must meet are:
Certify that you are the owner of the land
Have the construction license
Have a project prepared by an architect
Have an execution budget
* Have the energy efficiency certificate for your future home
How Does a Self-Build Mortgage Work?
A self-build mortgage is divided into different phases. This is how the experts describe them:
Initial or Ground Phase
When you sign the mortgage, the bank will give you a percentage of the amount of your loan; normally half. With that money, you can pay the construction company to start the work to build your house.
Certification Phase
As the work progresses, you will receive more money. Before each payment, the architect in charge of the construction will certify to the bank that the work is progressing as planned.
End of Construction Phase
When the architect certifies that the building is finished, you will receive a final installment of money (between 10% and 20% of the loan amount) to pay the rest of the bill for the construction company.
Capital Grace Period
Normally,
