Traditional arrears or advance stage payments? The type of stage payment mortgage best suited to your clients, will depend entirely on their individual circumstances and project requirements.
With an arrears stage payment mortgage, the lender will release money to buy the plot, usually 50% to 85% of the purchase price or value of the land and then release money for each build stage, after it has been completed and a valuer has visited the site.
An arrears self build mortgage is best suited to clients with sufficient savings to fund the early stages of the build as well sufficient savings for the deposit on the land. For example, if the client already owns the plot of land and can remortgage it to provide the funds to start the build, or if they've already sold their existing house and have cash available to buy the land and start the build, then an arrears mortgage might be the best option for them.
If your clients only have a small amount of cash available and don't want to sell their existing house to release equity before their new one is complete, or they want to keep the cash they have available until later in the project to maintain a good contingency fund, then an advance stage payment mortgage is ideal.
An advance stage payment mortgage is also particularly suited to those clients wishing to build a timber frame because this type of construction is more expensive in the early stages than a brick and block build because the whole system must be paid for up front.
Our Traditional Mortgage works on a typical arrears stage payment basis. But what you’ll find with BuildLoan is that our lending partners are able to offer up to 85% of both on both land and build costs – around 10% more than most other lenders – and this makes life easier all round.
Our higher percentages quite simply means that your clients have more money, enhanced cashflow and greater flexibility if they only have a small deposit.
At BuildLoan, we recognise that not everyone has the cash required to complete the early stages of their build – or is able to release equity from their existing property to buy or put down a deposit on land. That’s why we’ve created an alternative.
Our unique Advance Stage Payment Mortgage releases the funds at the beginning of each stage rather than the end. Intermediaries can access advance stage payments exclusively through BuildLoan.