Getting on the property ladder by building your own house is possible – you just need a self build mortgage. Self build mortgages work in exactly the same way as regular mortgages, you just get the money parcelled out to you at different stages during the build. And your valuer assesses the current value of the property at each stage – so don’t make any mistakes or you’ll be eligible for less money!
There are normally six stages of self build mortgage (i.e. six points at which money is released) and there are two types – one for brick and block houses and one for wood and timber frame houses.
In both cases all stages are identical except the third – which in the brick and block house is the wall plate being level; while in the timber frame house it’s the timber frame being erected.
Self build mortgages release money for the following stages (aside from the two differing stages just noted):
* Land purchase
* Starting costs and foundation laying
* Wind proofing and waterproofing
* First fix and plaster
* Second fix to completed house
The valuer values the land and releases funds for you to buy. He or she visits the site at each stage to reassess the value and release the next funding stage.
It’s important to talk long and hard with your broker about self build mortgages – how they work and in particular how the repayment schedule operates.
Since it’s safe to assume you are not living in your home until it is at least two thirds finished, it is also reasonable to assume that you may have a financial obligation through rent or another mortgage to cover at the same time. Be sure you can manage repaying self build mortgages and existing commitments both, until your home is finished to a habitable degree.
When you have built your house and created your estate, the next step is life insurance. Because now you have something to bequeath. You can get cheap life insurance online, often from the same place you found your self build mortgages – or at least through the same broker. Use the rule I’ve always used, if it ain’t broke why fix it, and if your broker gets you a good deal on the first then why not let him or her have first crack at the second?
Finding cheap life insurance online is a matter of looking at premiums and pay-outs and of course paying attention to the exclusion clauses in the policies you are being offered.
What is left out of your policy – in other words the things that the insurer will not pay out for – is the most important bit. There is, after all, no sense in paying for a policy that ends up not paying back when the money is most needed.