People on Grand Designs get "Development Mortgages&quot

[cjard]

So when I'm watching grand designs and some crazy fool is building a replica georgian mansion for 500K, and it ends up costing a million by the time they have finished spending 100K on windows that have replica wavy glass, they keep making reference to mortgages that pay in stages upon agreed comletion of a site milestone, like slab laid, walls up.. more cash comes in in regular lumps as the people develop..

Where do they get these mortgages from? Do they have a special name?

I've seen a mill that's been granted planning and I'd like to do the job, but the only finance that I've found so far ends up an eye watering 17% APR because it's essentially a bridging loan that a building co with enough float to do the work might use to just get the initial purchase done and then hit the project, recouping the massive interest charge as just another cost to the build. I'd be doing the job in my spare time, with some help from trades and family

It's currently a commercial property but I think that if it has planning for residential it should be treated more like a building site and favourably, it already has walls, roof and services so rather more like a "buy a shell and kit it out yourself"
Anyone know of mortgage companies that deal with these kind of properties/developments?

 

[ajstoneservices]

Self build mortgage. I've had a few.

http://www.money.co.uk/mortgages/self-build-mortgages.htm

 

[r.bartlett]

I had a conversation with the guy who built the white sugar cube project a few years ago. Decent chap and really knew his stuff.

My contention was that he could never in a million years bring that project in for 500k inc the land. His reply was "of course not but I called in lots of favours and you get a lot of assistance from the contractors and suppliers who use it as advertising"

There is am element of con in these programs but hey that's showbiz