Living in one's own house (built as per his or her own liking) is almost everybody's dream. But fulfilling this dream can get difficult at times due to various reasons. You may not get the home of your choice or with the kind of amenities you need. So the only alternative you are left with is to build your own house.
The process involves buying a plot of land, buying the building materials and employing the labor for the actual building work. You would end up spending the same amount of money that a house developer has to pay and you don't have to spend on marketing and sales costs.
The process is not as easy as it sounds though. Firstly, check if the plot you are considering for purchase has a planning permission for development granted. Once you have crossed this first hurdle, the next step is financing the building of the home. Self-building has become increasingly popular and plenty of banks and building societies offer mortgages to self-builders. The lender generally will lend anywhere from 25% to 80% of the land's value in addition to between 65% and 95% of the building costs. The money for the construction part is usually paid in arrears when key stages of the building work are completed.
Lenders usually disburse construction loans in five steps. The reason to do this is so that cash flow does not become a bottleneck. This point further emphasizes the importance of planning in a self-build project.
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