Self Build Houses and Stage Payment Mortgages in Ireland What’s Involved


this video I want to take a look as
cells build houses and staged payment mortgages so where I am here in Enfield
economies it’s quite common for parents of a son or daughter to give them a
slice to build a house on and then the son or daughter is perhaps going to get
married maybe married already and that’s what I
look at in this video stage payment mortgages and self build houses ok the
first thing to consider is site transfer obviously in order to build a house is
going to have to be a site transfer typically the site would be transferred
from parents to son or daughter the son or daughter may not be married yes and
so the site is only going to be transferred into one name so a key
consideration here at the outset when the mortgage is granted is whether the
bank is insisting on independent legal advice being given for the non owning
partner or mortgagee in other words if Johnny and Mary are basically building a
house and Johnny and Mary are taking on the mortgage from the bank what johnny
has been gifted a size from his parents well then as you can see there’s a
slight difficulty insofar as the site is being transferred into the sole name of
Johnny but the mortgage is going to be taken on by both parties so strictly
speaking the non owning spouse at a none owning girlfriend or partner at this
stage she is taking on a mortgage but she has no legal interest in the size or
in the property yes so he may need independent legal advice about this so
when the bank is issuing their loan offer the letter of offer in relation to
the loan they may insist that she get independent legal advice that she knows
that she’s clear she’s taken on a mortgage
she’s not going to be on the registered ownership of the site or the house in
the fourth instance maybe that’ll be sorted out later on
certainly one would hope so but that is something that she needs to be careful
about staged payment situation then with the mortgage basically what happens is
the loan offer is accepted by the borrower’s they instruct a solicitor and
the solicitor then will basically das with the bank and draw down the money in
three or four stages this way the borrower you was the borrower are not
paying interest on the whole back from day one but that you’re only drawing
down the money that you need for the various stages the stages would be floor
level perhaps wall plate level roof level and final finish off so you’re
probably looking at four stage payments before the solicitor can get the money
from the bank though the solicitor needs to put in a written request and stage
payment certificate this stage payment certificate will be signed by a
qualified architect or engineer who will have professional indemnity insurance in
place and that’s something that I’d be looking for as well and need to send
into the bank and need the stage payment certificate from the architect or
engineer and I need a copy of his insurance and to ensure that it’s up to
date and in force as I send in the stage payment certificates the bank will
release the money in stages into my bank account and I just transfer it on then
to the borrower’s my clients when the house is finished and yeah when the
house is finished basically I gather up all of the title documents and
ultimately I’m looking for a certificate of compliance for the final stage
payment from the rather the final stage payment certificate that’ll be coming
from the architect or engineer once that’s done then everything is finalized
ultimately I’m looking for a certificate of compliance with building regulations
and plan information I gather up all the title documents so that would be clear
information as certificates of compliance the transfer to
they said Johnny or whatever his name is and ultimately then I send all of those
into the bank and having registered the bank’s mortgage obviously on the Foley
or the new Foley let’s open so remember at the outset to the transfer of a site
to say Johnny I would register the mortgage on that
site and the bank wouldn’t be secure their interest will be secured in aspect
of their borrowing that’s essentially what happens in relation to a staged
payment mortgage it’s relatively straightforward but if you are at the
borrower and if you are organizing the building etc you do need to be careful
that you don’t proper overseeing a person either an engineer or an
architect supervising the build you need to ensure that you have an architectural
engineer who can issue the various stage payment certificates and you need to
ensure that you’ve an architect or engineer who will in the heat of the
hunt issue certificates of compliance with
client connection and building regulations
that’s essentially is as I say the non owning spouse if there is or not owning
partner and on owning borrower he or she may need independent legal advice in
aspect of taking on a mortgage and not being on the legal ownership initially
just to go back to that point if parents are giving a size to Johnny Johnny’s
their son there’s going to be a gift situation there and Johnny as a son is
going to have a fair old capital acquisitions tax exemption okay so he
needn’t be really worrying about tax gift tax on us however because his
girlfriend or if it’s vice versa has no direct relationship to those parents
then if they give the site or jointly she may well have the gift tax indeed
she will have a gift tax situation a gift tax liability so the century or the
best thing may be for the parents just to give the site to the Sun for example
in the first instance and then later when he and she get married the
borrower’s get married then he can simply just add her to the title deeds
as ownership or as a registered owner of the property at the property
registration authority and there is no gift tax and there’s no
stamp duty and there’s no tax implications hope you find this useful I
am a solicitor on entry that Humpty mead if you did like the video if you find it
useful even mildly beneficial give us a thumbs up down below and don’t be afraid
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happy to join up Thanks

Paul Whisler

3 Comments

  1. Cheers for that bit of info mate! Building a house hopefully this year and found this very helpful!

  2. Hi, How works if I don't have a site? I want to get a mortgage for the site and the construction. Thanks,
    Seb

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