If you are applying for a mortgage to build your new home you will need all the usual financial documentation plus you will need to supply specific documentation in relation to the site & the build
General documents required:
- Identification – valid passport or Irish / UK driving license
2. Address Verification – Original bank / Credit Union statement or original utility bill i.e., electricity bill or house phone bill.
3. PPSN verification – payslip
4. Marriage certificate if any documentation provided for the application is in applicant’s maiden name
5. Separation agreement or maintenance agreement if applicable.
6. Signed gift letter if funds are being gifted towards house deposit
7. Experian credit check if applicant(s) has resided in a foreign country within the last 3 years or where the applicant(s) holds a foreign property and / or bank accounts
8. Financials – 6 months statements for all bank / Credit Union / Post Office / mortgage / loan accounts / Revolut accounts / Creation Finance accounts held
9. Your last 3 months of credit card statements if applicable.
10. Lease or rental agreement if rent being paid or received is not visible on your bank statements
Self Build documentation required:
11. Cost of construction form as completed by your architect / engineer or surveyor & purchase price of site if applicable.
12. Confirmation of planning permission – we will need “notification of decision to grant planning” for the initial application. However, subject to approval of your application we will require a copy of full grant of planning.
13. House plans & specification and site maps.
14. When you are building a house the site can be used as your deposit / part of your deposit. If the site has been gifted we may need a signed gift letter confirming same.
15. You can apply for a joint mortgage if the site is in sole name only – joint mortgage / sole title application. This is quite common where a site is gifted from one applicant’s parents / family member, advice on this can be sought from your solicitor.
16. We will need to be able to prove that you can repay the monthly mortgage commitment to the lender. This can be evidenced by demonstrated consistent savings, evidenced rent or through current loan repayments where the loan will be repaid in full prior to drawing down the mortgage.
17. If you are paying for any self build costs EG engineers fees / planning fees I recommend that you have a narrative on your bank statement re same. These costs can be included as your contribution to the mortgage.
Stage Payments:
There are generally 5 or 6 stage payments for a self build
18. Foundation stage
19. Wall plate
20. Roof on and windows & doors fitted
21. First / second fix
22. Completion
23. At each stage your engineer will complete a stage payment request form, this is sent to the lender and they then will release funds to your solicitors account.
There are generally 3 valuations to be done during the course of the build:
24. Prior to start of build / foundation stage
25. When house is sealed IE roof on and windows / doors fitted
26. Completion of house – Lender will retain last drawdown until they have confirmation from the valuation report that the house is completed.
27. It’s very important to have sufficient funds available to complete your house. Lenders will include a contingency fund of 10% / 15% to allow for over runs. I think including a contingency fund is so important for those building a house. You don’t need to drawdown all the approved funds but to have additional funds available if needs be. If your new home is completed with less funds than you were approved for you can send a signed letter to the lender stating that you don’t need to drawdown the remainder of approved funds. Once the lender has this letter and the completed valuation report the mortgage can then be concluded.
28. However, if you don’t have enough funds to complete the house the lender will not release the final drawdown of funds.
29. You only pay the mortgage as you draw down the funds. Hence, you only pay back for what funds you have received, monthly repayment increases as you draw down mortgage.
30. My advice is to get approved for more funds than you think you’ll need! You don’t need the stress of not having sufficient funds to complete your new home or you don’t need the hassle and cost of applying for a top up!
31. You will need to have sufficient mortgage protection for the full amount being applied for but otherwise there’s no extra cost to you.
Help to Buy –
32. If you are first time buyers and buying / building your new home you can apply to revenue for the Help to Buy funds. Full details on Revenue.ie.
33. We will need to have your application reference and your access code for your mortgage application.
34. Insurance
35. Some lenders will require that you have ‘course of construction building insurance’. If you have a contract for the build of your house check what insurance your contractor has. Then you can obtain quotes for insurance available – an insurance broker will be able to advise you on this.
If you need any help or advice, please reach out to Helen Slattery on helen@sysmortgages.ie or contact us on 06757059.
