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Firm targets IFAs with self-build mortgage deal

Self-build specialist BuildStore is offering an intermediary mortgage product in a bid to help IFAs with clients looking to build their own home.

BuildLoan allows up to 95 per cent of the land purchase price and costs of construction to be borrowed in advance to enable customers to build a new house without having to release equity from their existing home.

Most self-build loans rel-ease funds in arrears, forcing borrowers to sell their existing property first or enter credit agreements with suppliers.

Funded by specialist lender Verso, the self-certification mortgage tracks the Bank of England&#39s base rate plus 1.25 per cent until the end of the term.

Maximum loan is £300,000 at 3.5 times main income plus one or 2.75 times joint income.

Redemption penalties are 3 per cent in the first year, 2 per cent in the second and 1 per cent in the third. Bro-kers get an introducer fee of £200.

Marketing and product operations director John Hay says: “Interest in self-build has been growing in recent years and, from feedback from brokers, we think there is a dem-and for a product which pays them for introducing business they would usually have to turn away.”

Charcol sales manager Colin Bell says: “It is a very competitive product, even compared with self-certification loans that are not self-build. We expect to do some decent business with it.”

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