In this brief guide, we will cover the bank of Irelands self buuld mortgage, its features and how it works.
What is the Bank of Ireland self build mortgage?
The bank of Ireland self build mortgage was a mortgage product which the bank of Ireland used to offer primarily for self builds. There is currently no trace of the bank of Irelands self build mortgage online and it is very likely the product is no longer available to new applicants.
If you are looking for a self-build mortgage fora project you intend to start then why not speak to a mortgage broker who may be able to assist you in finding the right self-build mortgage for your needs.
The bank of Ireland’s self-build mortgage guidelines was as per below when the mortgage product was being offered.
“A self-build can be daunting but armed with the right support it can lead to your dream home.
There are a couple of ways to manage a build project and this may be influenced by the type or scope of the build.
Building your own home gives you a huge amount of flexibility – it lets you choose a design that precisely suits your needs now and into the future. You can decide on layout, room sizes and design features to suit your budget.
The bank of Irelands self-build mortgage is a mortgage tailored to customers who are looking to build their own home or who are extensively renovating a property – where you can’t immediately put your key in the door. Unlike a standard mortgage, the bank of irelands self-build mortgage is typically drawn down in stage payments, spread over up to 18 months depending on the length of the build period.
How much money can I draw down for my bank of Ireland self build mortgage?
Maximum mortgages are generally 3.5 times gross annual income and 80 per cent of the property value (90 per cent of the property value for first-time buyers). In the case of a self-build, the property value is typically calculated as either the site purchase cost (if applicable) plus build costs or the final valuation upon completion. Typically, the lower of these two figures applies. It is also prudent to have an extra 10 per cent of the total cost to cover unforeseen expenses, contingences, cost overruns and furnishings.
You wouldn’t have had to be an expert to be approved for the bank of irelands self-build mortgage. The mortgage was open to anyone who had a scope of work laid out and was in a position to hire the type of team needed to execute the build.
The sort of talent you may need in your team to get a bankof ireland self build mortgagewould include:
- A contractor
- A site manager
- A structural engineer etc
What do you need to provide to the bank to make the application?
When applying for the bank of irelands self-build mortgage you would have been asked for a variety of documents.
This may have included your:
- P60 tax return
- 3 months worth of bank statements
- 3 months worth of payslips
- Building costs
- Building permissions and plans
- A valuation report completed by your ‘assigned certifier’ who must be a certified architect, engineer or building surveyor.
Once approved, how does a self-build mortgage work?
Before you commence the build, you will need to appoint a registered architect, chartered building surveyor or engineer to review and certify the works at each stage of the process.
Typically, you will input your savings/contribution upfront to fund the site purchase or the start of the build.
As the work progresses, the architect/chartered building surveyor or chartered engineer will complete Stage Payment Certificates confirming the amount of work that has been completed – your solicitor then requests the funds required from the bank.
When the build is complete the bank will need a final valuation report completed by the same valuer who completed the Initial Valuation Report, together with a Certificate of Compliance – the final stage payment under the mortgage can then be made by the bank.
Where’s a good place to start with regard to planning permission?
Your first stop should be your local authority. The Local Area Plan will outline a strategy for proper planning and sustainable development in your locality, including any planning restrictions. Your planned design may be influenced by your planning authority which means you may have to compromise on some design features in order to obtain planning permission for your build.
How can I keep on top of expenditure?
Make sure you get detailed quotations for all elements up front. When getting costs, make sure you distinguish between an estimate – an educated guess on the basis of an outline you have provided – and a quotation which is a written exact price.
Keep in close contact with professionals managing the build and ensure that any deviation from supply costs or schedule is flagged early so that you can put a plan in place to get back on track.
Building a house – The planning issues, Planning leaflet 4, is available at Environ. See environ.ie
A qualified architect should certify your building plans. You will find a list of qualified architects at the Royal Institute of Architects in Ireland. See riai.ie
A quantity surveyor can help you with costs and budgeting. The Society of Chartered Surveyors Ireland can help with suggestions.
The Health and Safety Authority’s Guide for Homeowners – Getting Construction Work Done Safely is another useful read if you’re hiring a builder.
Here are 10 tips compiled from self-build experience that may be helpful:
- Understand your local council planning requirements and restrictions for your area – you don’t want to have to row back on anything if you find you haven’t complied with all rules and regulations
- It may sound simple, but plan how you’ll finance your build project before spending any money
- Don’t buy any materials until all the planning is finalised
- Make sure you have adequate insurance cover for your site and for the build. Your mortgage specialist can help you with this
- Find out if each tradesperson’s work is guaranteed and insured. Ask to see a public liability insurance certificate
- When getting costs, make sure you distinguish between an estimate – an educated guess on the basis of an outline you have provided – and a quotation which is a written exact price
- Get contracts drafted up for each contractor – include price, scope and timing – and ask your solicitor to review the contracts before you sign
- Make sure that contracted trades people are members of the relevant association and have appropriate certification
- Deal with issues as they arise as it will likely be cheaper in the long run. No matter how small they seem, don’t ignore any issues that come up during the course of the project”
- Stay in regular contact with your contractors – keep a record of progress reports, reasons for any delays and photos of the site at different stages.
Use a mortgage broker for your mortgage in principle
You may want to use an independent mortgage broker to help you get a mortgage on your new home.
Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.
This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.
A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.
After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle.
This will allow you to shop for your home as more estate agents and sellers may take you seriously and it will also give you confidence that your mortgage is indeed a possibility before you make a full mortgage application.
Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.
This will come with a key facts illustration document that details the features of your mortgage including how much you will pay per month.
It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.
If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.
Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.
They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer, and set a completion date with the seller or their conveyancer.
This will then bring an end to the conveyancing process, at which point you will receive the keys to the house and move in.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.