Interest only self-build mortgage to build dream home

Interest only self-build mortgage to build dream home

Article by Martin Ball Mortgage Adviser - Private Clients

What was the situation?

I was approached by my cost-conscious client who was planning to build their dream family home. They had an existing mortgage of £600,000 on their home in Hertfordshire that is worth £1.5 million. Planning had already been obtained to knock down the existing house and build a substantially larger family property.

The client wanted to borrow an additional £800,000 on top of their existing mortgage via self-build finance. Once complete, the property is estimated to be worth £2.3 million, at which point we will review the situation and remortgage the property to a standard residential lender.


What was the issue?

Self-build mortgage enquiries are often more complex to arrange than a traditional mortgage due to the lack of traditional mortgage security until the property is complete, as well as the project monitoring requirements needed for lender confidence. However, my extensive professional relationships with lenders in the industry meant that I knew which lenders to present this case to.

In addition, my client had already been let down by their bank so needed me to step in and help take back control of the situation. Working with my client, it was imperative for me to find a solution quickly that would give them the flexibility they needed at the most competitive pricing to progress the project.


What was the process?

Initially, I needed to ensure I fully understood the type of build, complexity and costs involved in the project to make sure the client received full flexibility with the best terms.

Having previously arranged multiple self-build mortgage enquiries, I knew which lender I needed to approach. I was able to leverage the maximum possible loan based on the clients financial situation ensuring the full cost of the building works were covered, whilst making additional funds available for a healthy contingency should it be needed.

By discussing the application in house, we were able to pool our knowledge of the market and approach senior contacts at various lenders in our network. In doing so we were able to speak directly to the people that could make decisions to get terms sent to the client swiftly.


What was the solution?

I was delighted to be able to present a 2 year facility at an excellent rate for my client, allowing them enough time to complete the build on an interest only basis and keep costs down. There are no early repayment charges meaning that once complete, we can remortgage to a high street lender at a more competitive rate.

The client was delighted with the solution we presented which allowed them to move forward in creating their dream home.


Lending solutions with LDN Finance

Do you have ideas of building your dream home, but need finance to help fund the project? We’re here to help you find a solution – no matter how complex your circumstances. At LDN Finance, our specialist brokers have extensive experience in providing creative solutions to secure large loans for our clients.

We work closely with our trusted network of private banks and both high street and specialist lenders to arrange bespoke mortgage arrangements to suit your circumstances at competitive, market-leading rates. 

Get in touch with us to organise an initial consultation.

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Our happy clients

Excellent and outstanding professional service from start to finish. From offering as many options as possible, to explaining to me very quickly what the benefits are and what I should really be thinking about moving forward. Thoroughly recommend.

Mr. M

July 2021

5 Stars! The LDN team supported us purchasing our family home, without their support and as an expat it would have been very difficult to obtain our new home in the UK. I would totally recommended them.

Mr. S

August 2021

Johnny Martin held our hands through the entire process calmly and professionally. Brilliant service, efficient and swift in response to everything. He made the entire journey uncomplicated even when the bank made it complicated. Highly recommended.

Mr. H

July 2021

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