After starting a Pinterest board named ‘Mi Casa’, because ‘Interior Design’ sounded too pretentious and ‘My House’ in English was too basic, I promptly added 47 pictures of A-Frame cabins. After my third brushed bronze extending kitchen tap and sixth industrial-style hanging dining room light, I started to feel a little overwhelmed. Whilst the finishing touches are a lovely way to turn a house into a home, not only do we not have the foundations down but we don’t yet have the land to put the foundations on.
Trying to avoid a defeatist mindset I started googling. ‘How to build your own home’, ‘How much does it cost to build your own home’ ‘Can you get a mortgage on a self build project’ and quickly realised I was a long way out of my depth. It was going to be a while before my hardest decision was finding a balance between hygge and industrial furnishings.
Suddenly the dream of buying a beautiful patch of land in the mountains was slipping further and further away and an impending sense of office job monotony started creeping in again. At this point, my ingrained, millennial sense, of not being able to accept no as an answer kicked in and the start of 6 months research commenced. From mortgages, to business loans, to the return on Airbnbs, anything that had the remote chance of giving us a shot at freedom was fair game. We’ve still got a long way to go, but this is what I’ve learned so far.
You have to have money, before anyone will loan you money.
Getting a mortgage is hard. Getting a self-build mortgage is even harder. Don’t have a deposit? You’re screwed. After Christmas I started looking at our options and making enquires with a broker. The long and short of it was, with anything under a £10,000 deposit, unless you’re purchasing bricks and mortar, no one is interested in lending to you. Building your own home is risky and so much can go wrong compared to buying an existing property. Whilst it’s significantly cheaper overall and you can get exactly what you want, expect to put up at least a 30-40% deposit. If you don’t already own the land to build on, this could easily be in the region of £75-100K. Now, we don’t have that. Not even a 10th of that. So we had to go down a more creative route. If you can find something to secure it against, like property you or your family already own, investments or a car, then some lenders might start entertaining your application.
Having a few defaults on your credit report, isn’t the end of the world.
I’ve worked for a financial giant my entire adult life. A portion of which was spent in customer services, where I’ve had grown men and women scream, panic and cry over the fear of defaults on their credit reports. Until now, I’ve never tried to get anything more than finance on our car. I just assumed you would need a squeaky clean profile, earning a mint with a huge deposit or backing from the bank of mum and dad to ever be approved for a mortgage.
Turns out, even with a few misdemeanours it’s possible. After the financial crash, lenders definitely tightened their criteria and became far more risk averse than the early 2000s. However, these days there are companies willing to help those who have been shafted by the big banks, even if it does mean you’ll pay an extortionate amount in interest.
There is so. Much. Paperwork.
Proof of address. Certified copies of ID. 36 pages of terms and conditions, counter signatures, guarantees, statements, letters of consent – the list of supporting documents feels endless. Just when you think providing the video of your birth along with a blood sample is enough, they’ll ask for the midwife who delivered you, to voucher for the birthmark on you left shoulder.
Okay, so that might be a little bit of an exaggeration, but don’t expect the process to be fast. It took 3 months of back and forth almost everyday for us to finally get approved for the money. Have patience young padiwan.
Everything has a cost.
Even transferring the funds to your bank account. There’s a £30 charge for that for some reason. Expect every man, woman and child who so much as glances at your application, to have some sort of cut of the profit. Usually all these fees just get added to your overall loan amount but they do add up and can quickly add a year or twos worth of extra payments to the length of the agreement.
It’s a long road to freedom.
This time last month we finally got approved for our loan. The sense of relief has been intense and meant we can actually go up to Scotland knowing we can buy our own piece of paradise. The first step is the hardest and the last three months have been long, but this is just the tip of the iceberg. I have no idea what’s in store for us next, but I’m confident it’s in equal parts exciting, challenging and filled with paperwork.