Building your own home may be challenging in every respect, but key to success is ensuring you have a mortgage in place that meets your needs.

Once you have your plot of land, planning permission and your builder, one of the most difficult aspects can be securing the necessary finance but there is a wide range of lenders who are happy to help.

From a financial point of view, there are more risks and complications involved in a self-build project, therefore a good self-build mortgage will be structured to help you get over the various hurdles.

Clearly, the main difference is that with a self build mortgage, money is released in stages as the building progresses, rather than in one lump sum with a standard mortgage.

With regard to self-build mortgages, there are generally two main types:

• A traditional arrears-based mortgage released in staged payments on completion of each stage. This is a very structured mortgage, with deadlines set for the project.

• An advance payment scheme which releases funds in advance of each stage of construction and removes the need for bridging loans (the stages can be fixed or flexible but there are usually five and these depend on the type of building work).

For many, there is the added matter of remaining in your current home while the new one is being built. In this instance, lenders have different attitudes as to how this can be addressed, so the important aspect is to demonstrate that you have enough income to cover both mortgages.

However, before you get a mortgage, you will have carefully planned your budget so you can take into consideration the total costs of how the payments for each stage are to be met. Your mortgage lender will ask to see this and before moving your application forward they will ensure that all your costs are properly covered, taking into account issues such as land costs, professional fees, building work, materials and any possible extras, should something unforeseen come up.

There are a number of key points to remember:

• Make sure you know what you can take on yourself and, if necessary, employ a surveyor, planning consultant and project manager

• You will need to make sure that you hire a good builder in order to reduce the risk of the project over-running

• Getting the right insurance and warranty cover is also vital so that you can be protected

• Ensure you have sufficient cover for your legal expenses

• It is essential to include an amount for contingency – to cover unexpected costs which might come up

Planning is a key essential in first getting a mortgage and then ensuring that the project runs smoothly. It is important to keep updated at every stage and ensure that targets are met and that any problems are quickly rectified.

For more advice on self-build projects, visit the website at www.nidirect.gov.uk