If you want to build a house and need financing to do it, self-promotion mortgages are the solution.
What is a Self-Promotion Mortgage?
A Self-Promotion Mortgage is a mortgage loan particularly aimed at those people who need financing to build their home.
This financing can be 100% of the actual price of the construction, as long as it is limited to 70% of the replacement value in the case of a completed construction.
What conditions does a self-promotion mortgage usually have?
A Self-Promoter Mortgage usually offers a maximum repayment period of 30 years if it is your first residence and 25 years for second homes, apart from a grace period that usually reaches 2 years.
What conditions must be met?
To contract a self-promotion mortgage, it is necessary to have several documents and licenses. Otherwise, the bank will reject your request and you will not have the possibility of financing the construction of your new house. Do you want Ferco to take care of finding the ideal mortgage for you? These are the requirements you must meet:
- Guarantee that you are the owner of the land on which you are going to build the property by presenting your simple registry note, which is a document that will be provided to you at the Land Registry. The plot, in addition to this, must have an urban land qualification and have no charges.
- Have the construction license, which must be given by the municipality of the town hall in which you want to do the work.
- Have a project prepared by a technical architect and certified by the Institute of Architects that corresponds to your population.
- Have an execution budget, which must be prepared by the construction company.
- Have the energy efficiency certificate of the future house. The construction company must give it to you in the drafting phase of the execution project. In addition to this, as is logical, you have to be solvent: have savings, a good job, a sufficient salary…
¿How much can I ask for the mortgage of my future house?
Another frequent question about these products is what percentage of the construction can be financed. In general, mortgages to build a residence usually cover 80% of the budget for the works or the appraisal value of the future house (it is determined by an appraiser before starting the works), whichever is lower.
As you can see, you will need savings to pay for twenty percent of the construction. As it is not a purchase of a house, you will not have to pay the expenses associated with a purchase and sale, however you will have to have sufficient own funds to face other expenses related to self-construction: VAT of ten percent on the cost of the building, the cost of municipal licenses, the fees of the technical architect, the expenses of deed and registration of the house…
Self-promotion Mortgages How do they work?
These loans are specifically designed to accompany you in the payments that you will have to make in the construction process of your house or in the assembly, if it is a modular house.
Generally, in this type of mortgage, the bank delivers the agreed amount progressively. As the work progresses and the phases foreseen in the project are completed, the bank delivers the excess financing. The key when requesting a self-development mortgage is that the amount requested fits as much as possible to the budget of the project. Once the work is finished, a long-term mortgage loan will be signed.
Initial stretch or floor
You will initially receive up to fifty percent of the appraisal of the land on which you will build your house.
Tranche of certifications
As the work progresses and with the certifications of the technical architect, you will have the precise amounts to cover the construction phases.
End of work section
Once you get the completion certificate and the first occupation license, you will receive the last payment, which is usually between ten percent and twenty percent.
Owning a home is not within everyone’s reach. If you wonder how much you should have saved to be able to buy a house, you should know that opting for mortgages that finance you 100% is practically impossible today, and that both the purchase and sale of a property and the granting of a mortgage They have associated expenses that can amount to thirty percent of the value of your future residence. In this context, many are considering other alternatives to access the real estate market, such as self-promotion. Now, despite the savings of building your house, the expense is high. Certain banks have autodeveloper loans or adapt their standard offer of mortgages for the construction of your house.