Self-Build/New Build homes – Things to consider

Listen back to find out all you need to know about mortgages for Self-Build/New Build homes.

Listen back with John Duggan.

Podcast Link: Self-Build/New Build Homes

Self-Build

If you are interested in building your own home, it’s important to understand how a lender will assess the proposal and how much you can borrow. This will depend on a few factors:

• the square footage of the proposed property
• Value and source of the site e.g. gifted site / purchased site
• Your own deposit and contingency funding.

 

To proceed with an application, you will need to have full planning permission in place, along with costings provided by an architect or engineer who will be overseeing the build of your property.

 

If you are lucky enough to have been gifted a site, the banks will allow this to be used as your deposit and will allow you to borrow up to 100% of the build cost. If you are purchasing a site, the banks will allow you to borrow up to 90% of the value of the site and up to 90% of the build costs.

 

As the costs of building in recent times have increased, lenders are also looking for contingency funding to ensure applicants have funding in place for cost overruns. This is usually between 10-15% of the proposed build cost, depending on the lender. This will need to be evidenced by way of cash savings, Help-to-Buy, or family cash gifts (or a combination of).

 

Help-to-Buy has been extended for first-time buyers until Dec 2024 providing maximum relief available for up to €30,000. If you are a first-time buyer looking to build, don’t miss out on this pot of money!

 

Your mortgage broker will be able to guide you through the lender options and advise on the best terms for your project.

 

New Build

There are more and more properties being constructed in Ireland to try and meet the demand. There are two key schemes to understand when looking to buy a new build home.

 

If you’re a FTB, you can benefit from the Help-to-Buy Scheme which provides up to a maximum of €30,000 towards your deposit of the property. It’s an absolute no-brainer to apply for this and benefit from the additional pot of money!

 

The First Home Scheme was introduced in 2022 and is a Government back shared ownership scheme. With many clients struggling to get onto the property ladder, this scheme is here to help bridge the gap between the proposed purchase price and the deposit and mortgage funding the client has available.

 

Speaking with your mortgage broker will help you understand the benefits of the schemes and how they may help you buy your first home.