The Self Builders Podcast
Episode 11 - What lenders are looking for
May 7, 2024
Unlock the secrets to successful self-build financing! Discover the key factors lenders look for in mortgage applications. Learn what essential documents you'll need, from proof of deposit to income verification, to simplify the process. Find out how self-employed individuals can align their financial profiles with lenders and avoid common pitfalls. Explore the intricacies of property development financing and understand cash flow requirements for smooth underwriting. Get ready to confidently navigate your building project funding!
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Quick takeaways
- Self-builders must provide a 25% deposit and documentation like bank statements and gifted letters to lenders for mortgage approval.
- Thorough documentation of income and detailed building cost breakdowns are essential to expedite the self-build mortgage underwriting process.
Deep dives
Understanding Lender Requirements for Self-Build Mortgages
Lenders have specific requirements for self-build mortgage applications that self-builders must prepare for. Applicants typically need to provide a deposit, usually around 25% of total costs, along with proof of these funds through bank statements, which should cover the last three months. If the deposit involves a gift from family or friends, a formal gifted letter is required to confirm that the giver has no interest in the property and that repayments are not expected. This ensures transparency in financing, reducing the chances of delays later in the process.
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