Many people choose to build their own houses for various reasons. Some view it as a way to own a home at a cost that is lower than its market value. It is also convenient to construct a house to the specifications of an individual, rather than modify an already built one. Self-build mortgages are specialized home ownership schemes that are meant for an individual who prefer to erect their own houses, or if one intends to renovate their homes.

These schemes are different in comparison to traditional ones; they have their own terms and conditions. In some cases, the institution may only finance the house, while others may also offer funds to purchase the land. Depending on their preference, one may consider the one that suits their circumstances.

Funds may be availed to the borrower in two different ways. The money may be released in stages, corresponding to the progression of the project. This is often referred to as an arrears stage payment. It may pose setbacks, especially if funds are delayed and throw the whole project off the initial schedule. Nevertheless, one may liaise with the financier to release the funds promptly to ensure that the project remains on schedule.

Alternatively, the institution may use the advance stage payment. This is where they release the funds before each stage is begun. It has an obvious advantage of availing cash flow to the project before any stage of construction is commenced. It can however be problematic if there are unforeseen costs or if prices of materials increases midway during the project. One may implement contingent arrangements with the institution to cater for such setbacks.

These mortgages allow the borrower to get higher principal because middlemen are eliminated. The rate of the mortgage also remains relatively constant throughout the repayment period. This is not only beneficial to the borrower, but it also increases the value of the house when the cost to market value is considered.

In these arrangements, the financiers often consider several factors. For starters, one has to build the house in a locality with the basic amenities and adequate security. The architectural design has to not only conform to the neighborhood, but also positively influence the market value.

Self build mortgages have many advantages in comparison to their normal counterparts. If one is inclined to build their own homes, then they are the way to go. However, the initial principal cannot be raised if one needs additional funding. This is because of the fixed rates, and one can only access more funding by applying for a loan on a pricier house.

For some more information on self build mortgages, please go to http://www.remortgagesupermarket.co.uk/