Self Build Home Loan

Once the customer has completed the build you will need to submit a FMA to repackage the loan on to our Purchase range (incentives available at the point of application apply). We also require the following documents to convert the mortgage:

• Supervising Architect’s Professional Consultant’s Certificate and valid Professional Indemnity Insurance
OR
• NHBC/Other acceptable structural warranty registered builder 10 year structural defect warranty for the property
AND
• Final Building Control completion certificate
• Professional valuation

Standard construction materials accepted (eg brick/block or timber framed with a slate or tiled roof). Please refer to your BDM if alternative materials or means of construction are proposed.

Architect Supervision (On the Grip/Direct Labour) – Danske Bank Self Build Template completed by the supervising Architect or Quantity Surveyor. This template will include all necessary declarations and confirm:

• Detailed costings for the construction, including VAT whether reclaimable or not.
• The costings represent a formal “Cost to Complete” the property.
• The property meets all specifications outlined in the plans, facilitating the issuance of both the Professional Consultant’s Certificate and Building Control completion Certificate.

Contractor (NHBC or other structural warranty) - A copy of the fixed price contract (to include VAT where appropriate) for the construction of the property is required, signed by both builder and client.

We recommend costings to complete the build should include a contingency of 10%. Costings should provide a detailed breakdown taking the project to completion. They should also include VAT and detail the amount included for overruns.

Your customer must be able to evidence a minimum level of financial resilience as part of their application for a Self Build Home Loan.

Where your customer is putting a cash stake towards the build, we expect them to utilise these funds before requesting any draws. The first drawdown should only be requested by their solicitor when the Architect/Contractor confirms that work to the value of the cash stake has already been completed and paid for by your customer. Your customer should also provide receipts for any associated payments to their solicitor.

Our Self Build product is not available as a Foreign Currency Loan.

Contractor led:

We accept the following warranties for Self Build applications:

• ABC+ Warranty
• AHCI Limited (Advantage) – Latent Defects Insurance
• Ark Insurance Group Limited – Latent Defects Insurance
• Build-Zone Insurance (a trading style of Sennocke International Insurance Services Limited)
• Checkmate (Lockton LLP) – Castle 10
• Global Home Warranties Limited
• International Construction Warranties (ICW)
• LABC Warranty (MD Insurance Services Ltd. Is the scheme administrator for LABC Warranty)
• NHBC
• One Guarantee Limited
• Premier Guarantee
• Protek Group Limited
• Zurich Municipal Policy - (note that although no longer providing new scheme warranties, as at December 2015, this provider was supporting existing schemes, some of which include unsold property, so a new warranty may still commence in the current year on first sale). The warranty book has now been sold to Armour Risk Management (March 2018).

Architect led:

• Architect/Surveyor (Professional Consultant) Certificate – The bank will accept a valid PCC as warranty cover on a Self Build property. Acceptable qualifications and indemnity cover are checked by the solicitor in accordance with the UK Finance Mortgage Lenders’ Handbook

Retrospective warranties are not acceptable.

Please note that when applying for a Self Build mortgage, the customer must choose whether the project will be architect led or contractor/builder led. This decision is final and cannot be changed once the application has been submitted.

Self Build is not available for properties outside of Northern Ireland.

Full planning permission or outline planning permission and reserved matters must be in place for us to consider an application. Some documents may be available at Northern Ireland Planning Register.

We recognise the uncertainties that can arise when determining if a lender will accept specific sites for Self Builds. To streamline this process, we offer pre-application site reviews. Please provide your BDM with the:

• Approved site map (highlighting the proposed security/access in red)
• Relevant Planning Reference

Your BDM will then indicate if the site meets our lending requirements. However, please note the final decision to make an offer is contingent upon the independent valuation.

We require a full professional valuation at application stage to confirm the future value of the property. We do not require additional valuation ahead of each drawdown. A further valuation is required at completion where you are repacking the loan on to our Purchase rates.

Once we receive your fully packaged application and have completed our admin checks, we will instruct the professional valuation before progressing the Underwriting.

We offer flexible drawdowns, up to a maximum of 8.

We utilise your customers solicitor to request and be the recipient of drawdown requests. Customers will need to supply the solicitor with interim architect certificates/builder invoices in advance of each draw. The requirements for this will be detailed as part of the illustration.

Customers are only charged interest on the amount drawn. Please see section Unutilised funds for more information.

When a Self Build is 3 months away from expiring, we will contact you to understand your customers circumstances. Please reach out to your BDM for guidance should it transpire the build will not be complete within the 2 year period.

If, during the build, further borrowing is required, an application should be submitted for assessment in line with our lending criteria. Affordability must be evident. A fee of 1% of the loan amount or a minimum of £150 applies. Please reach out to your BDM for guidance.

0.40% paid on first drawdown. We will pay an additional 0.40% upon completion of the build when you repackage the loan on to one of our Purchase rates.

A fixed fee of £1,495 applies to Self Build loans. This cannot be added to the loan amount. We will collect this fee by deducting the amount from the first drawdown requested by the solicitor. Confirmation of this will be detailed in the customers Offer.

When repackaging the loan on to Purchase rates, any applicable product fee’s may be added to the loan at this stage.

You can save a copy of the webform application prior to submitting it to us for assessment. To do this:

• Complete all the relevant fields of the webform application as usual
• On the ‘Application Summary’ screen, click on the arrow of each sub heading to expand each section
• Once all headings are expanded, click on the 3 dots … (Settings and more) on the top right-hand corner of the screen
• Scroll down the list and select ‘More tools’
• Click ‘Save page as’
• Change file name as required and save in preferred location
• You may now submit the application for assessment

We utilise the customers solicitor for the majority of standard documentation required for a Self Build, and to request and fulfil drawdown requests. Customers will need to supply the solicitor with interim architect certificates/builder invoices in advance of each draw.

Documentation required for solicitor

*Other conditions may apply when we assess the application

In cases where your customer does not fully utilise their Self Build loan by the completion of the build, they are only obligated to convert the actual amount used into a mortgage. For example, if a customer is granted a £250,000 facility but only draws £200,000, you are only required to repackage the £200,000 used.

Furthermore, if a customer fully draws down their facility but has leftover funds post-construction, they can apply these surplus funds to reduce their loan balance without incurring any penalties, thereby decreasing the total borrowing amount that needs to be repackaged.