BuildLoan and Nottingham Building Society have launched three new cost-based self and custom build mortgage products.
The new range offers funding up to £600,000 and up to 80% of the client’s project costs along with the option of interest only during the build, to improve affordability while clients may also be paying for other accommodation.
Each of the products offer funds released in stages based on the cost of each element of the work. BuildLoan confirmed that stage releases are agreed at the application stage and as there are no valuations during the build, the pre-agreed stages are then guaranteed to be released once each element of work is complete.
The first product has an initial pay rate of 3.80% for two years, which is a 1.94% discount from The Nottingham's variable rate, reverting to 4.24%. The second product has an initial pay rate of 5.00%, representing a 0.74% discount for two years and reverting to 4.24%, while the third product is a fixed rate with an initial pay rate of 3.74% until 31 May 2023, reverting to 4.24%.
BuildLoan head of product development and underwriting, Chris Martin, commented: “These products take away the cashflow risk associated with some self and custom build mortgage deals which base the stage releases on the value of the site – agreeing the releases based purely on cost takes away this risk and gives clients a huge amount of confidence that they can press on with their build.”
The Nottingham’s Head of Intermediary Sales, Nikki Warren-Dean, added: “Our lending is now linked to the cost of each stage of work, with a guaranteed stage release pattern agreed at application. This cuts out the need for interim valuations, taking away the risk of a customer potentially not getting the funds they expected.
“There can be no underestimating the peace of mind confirmed cashflow can bring – in fact it can be key to a successful and efficient self-build project.”
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