Self-developer Mortgages

Self-development mortgages are a type of loan that does not finance the purchase of a home, but rather the execution of the work. This means that there are some aspects that work the same as in ordinary mortgages, but also that there are others that do not. The first thing to know is that this type of aid, in general, does not include the purchase of the land, which must be borne by the buyer. Regarding the way in which this mortgage is foreclosed, it is important to know that it can vary depending on the bank that you bet on. In general, self-development mortgages tend to cover a maximum of 80% of the value of the property, and their duration ranges between 10 and 30 years. Due to the nature of these types of loans, mortgages to build a house do not usually give the entire capital at one time. The usual thing is that the money is delivered in installments, according to how the construction progresses. According to Idealista, three different sections can be distinguished:

-Ground section: it is the first phase or initial phase. The client usually receives 50% of the loan, and allocates it to the architectural project and the start of the works.

-Certification section: it usually represents 20 or 30% of the loan and is designed to meet the payments that arise as the work progresses. In this phase, the architect or whoever is responsible for the project must provide supporting documents that support the progress of the work, which will have to be presented to the bank as proof and guarantee.

-End of work section: the remaining part of the loan is obtained, which is usually 10-20%. At this time, the construction must be finished and the next step is to obtain the certificate of occupancy.

Requirements to meet

To access a self-development mortgage, as to access an ordinary one, a series of conditions must be met, such as having a solvent profile that gives security to the bank. Other aspects that banks will take into account are the following:

-That the land is owned by the applicant and is in his name in the Land Registry.

-That the land is classified as developable land.

-Have the construction license and that the project is validated by the College of Architects.

-Submit an energy certificate in the drafting phase of the project, which qualifies the level of energy efficiency of the house before it is built.