A self build house project diary
by Oliver Cannell
Tuesday 27th August 2013
(published/edited Friday 20th December 2013)

Researching other Self Build mortgage lenders

After getting nowhere with brokers I've decided to look into other self build mortgage lenders myself.

So, I finally had a decent set of company accounts for the last year and I was hopeful of being able to make some headway in getting a mortgage lender to see the light. I had a meeting with my mortgage broker / financial advisor who took down all the details again and everything seemed to be much more upbeat and positive.

The only real sticking point was that lenders normally look at the previous 2-3 years of accounts and take an average and/or look for positive upward trend in profits. Obviously my previous year wasn't too rosy - which is what caused all the hassle in the first place - so the broker was hoping to talk to them about what they'd take into account.

After numerous emails and letters between me, the broker, the lender and my accountant - all trying to persuade the lender than my figures were correct - there was one element of my income they said they wouldn't be able to include in my total for the year. I don't pretend to understand all of it, or indeed most of it, but they basically weren't able to consider a proportion of my income for that year as useful for their calculations. So, they came back with an amount which I'd be able to borrow - about £30k less than I needed! Boo!

My stance since day one with this project, is that I want to make sure I have all the money in place before doing anything. Being £30k short of my target amount isn't worth considering - it's not an amount I could easily make up by selling some stuff or even by getting another job (yet another!). I'm not ready to give up, although I do feel like giving up more often these days. And I think there are more options available to be explored.

This is especially true when only one lender has been approached to date. How come? Well, originally I applied through BuildStore... who only seem to use Birmingham Midshires as far as I can tell. And then having applied through another broker - whom I assumed would trawl the field for all the options - also came back and said that he'd applied through Birmingham Midshires. I wasn't confident at that stage, based on BM's previous performance... but I was hopeful that the broker would be able to talk their language and get me the offer needed. Unfortunately not.

Obviously I am very disappointed with the outcome to date. I concede that if my figures were better, I'd be able to get a mortgage without a problem... so it's neither the lender's fault nor the broker... but it took a LONG time to get any answers from BM and I wasn't too impressed with the speed or efficiency of the broker.

Time to take matters into my own hands.

A Google search and cup of tea later, I'd found a list of mortgage lenders who are able to cater for self build mortgages. Having created a short list of lenders after looking through their website - some were only able to lender to local people - the following two looked the most promising.

Norwich & Peterborough BS

http://www.nandp.co.uk/mortgages/types-of-mortgage/self-build/

I gave them a call and found out they are willing to lend to anyone in the country but required a minimum income of £35k.
Very were nice people and very helpful but unfortunately they weren't able to work the figures I had available.

Earl Shilton Building Society

http://www.esbs.co.uk/mortgages/self-build-mortgage

From the outset they were very positive about the possibility of being able to lend me the amount required and can offer self build mortgages to people in any part of the country. Although they did say that they consider self build projects on a case-by-case basis so would let me know once they had some outline figures to look at.

Their interest rates seem fine and all their fees seem to be on par with other lenders. I also enquired about how they actually underwrite their mortgages and apparently they do it all themselves. I was half worried that they might sub-contract this out to someone else - namely Birmingham Midshires, which I had no luck with before.

Personally I have never heard of Earl Shilton before, but according to Wikipedia and information on their own website they have been around since the 1857. Impressive.

So... I have sent them all the figures I have and am waiting to hear back.

Fingers crossed - again.

Next entry: Self build mortgage gets the go-ahead… although I’m not counting chickens yet! (Tuesday 10th September 2013)

Previous entry: What a load of bankers!! (Monday 18th March 2013)

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