How is the project funded?

The most common funding is arranged with custom and self-build mortgages from specialist building society and bank lenders who offer two types of packages, which are defined by the timings of when the funds are released, during the build, either in arrears or advance.

How much you can borrow will of course ultimately depend on your overall finances. On average it is possible to borrow up to 85% of the whole project market value. The government is introducing a ‘Help to Build’ loan scheme with just 5% deposit, so keep an eye out for this too!

The amount you contribute to the loan and hence the amount you will need to borrow will depend on your personal circumstances and can be generated from a number of sources:

• Re-mortgage your existing home and repay the loan when and if you need to sell the property.
   
• Sell your existing home and live in rented or family accommodation until your home is completed.
   
• Use of cash and other assets and investments.

You will usually need to buy and pay for your home plot upfront with the build costs being paid by instalments. When it comes to funding your custom or self-build, it’s important to speak with an expert mortgage adviser who can look at your financial circumstances and project requirements to recommend and tailor a borrowing solution to suit you and your new home.

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