BuildLoan and Nottingham Building Society launch new range of cost based mortgages for self builders
BuildLoan has worked closely with Nottingham Building Society to launch three new cost based self and custom build mortgage products.
All of the new range offers funding up to £600K and up to 80% of the client’s project costs along with the option of interest only during the build, to improve affordability whilst the clients may also be paying for other accommodation.
The first product has an initial pay rate of 3.80% for two years, which is a 1.94% discount from The Nottingham’s variable rate, reverting to 4.24%. The completion fee is £1,499 and there is no application fee.
The second product has an initial pay rate of 5.00%, representing a 0.74% discount for two years, reverting to 4.24%. It has no completion fee and no application fee.
The third product is a fixed rate with an initial pay rate of 3.74% until 31/05/23, reverting to 4.24%. The completion fee is £1,499, and there is no application fee.
All of the products offer funds released in stages based purely on the cost of each element of the work. Stage releases are agreed at application stage and as there are no valuations during the build, the pre-agreed stages are then guaranteed to be released once each element of work is complete.
The approach of linking stage releases to build costs rather than the value of the site, means that clients have the peace of mind of knowing that they will receive funds when they need them during the build without the risk of a down valuation. This means clients know they will have funds when they need them to pay for materials and contractors.
Chris Martin, Head of Product Development and Underwriting at BuildLoan, commented: “These products take away the cashflow risk associated with some self and custom build mortgage deals which base the stage releases on the value of the site – agreeing the releases based purely on cost takes away this risk and gives clients a huge amount of confidence that they can press on with their build.”
Nikki Warren-Dean, The Nottingham’s Head of Intermediary Sales, explained: “Our lending is now linked to the cost of each stage of work, with a guaranteed stage release pattern agreed at application. This cuts out the need for interim valuations, taking away the risk of a customer potentially not getting the funds they expected.
“There can be no underestimating the peace of mind confirmed cashflow can bring – in fact it can be key to a successful and efficient self-build project.”