To apply for a loan from any of these entities, you must follow practically the same process as applying for a normal mortgage: you have to contact the bank, present the documents it asks for (we explain them below), order an appraisal and wait for your request is approved. If the entity sees the operation as viable, you will be able to sign the credit before a notary.
Keep in mind, however, that the bank will not give you all the money at once after signing the contract. In self-promoter mortgages, the money is delivered in several installments or phases over a period of about two years:
- Initial phase or “floor”: when you sign the mortgage, the bank will give you a percentage of the amount of your mortgage; usually half. With that money you can pay the construction company to start the works.
- Certification phase: as the work progresses, the entity will give you more money in various installments. Of course, before each payment, the architect in charge of the construction will have to certify to the bank that the works are progressing as planned.
- End of work phase: when the architect certifies that the building has been completed and that the home is habitable, you will receive a final installment of money (between 10% and 20% of the amount of the loan) to pay the rest of the bill the construction.
Normally, during those two years a capital deficiency is applied. That means that you will only be charged the interest on the mortgage, that is, you will pay lower installments. When that period ends, you will pay normal monthly payments (of capital and interest) until you pay off the debt. The repayment period for self-promoter mortgages is usually a maximum of 30 years.
Requirements to build your house with a mortgage loan
As we explained before, to contract a self-promoting mortgage it is necessary to have various documents and licenses. Otherwise, the bank will deny your request and you will not be able to finance the construction of your new home. These are the requirements you must meet:
- Certify that you are the owner of the land on which you will build the property with the presentation of your simple registry note, which is a document that will be provided to you in the Property Registry. The site must also be classified as urban land and have no loads.
- Have the construction license, which must be issued by the town hall of the municipality in which you want to carry out the work.
- Have a project prepared by an /aarchitect and validated by the College of Architects that corresponds to your region.
- Have an execution budget, which has to be prepared by the construction company.
- Have the energy efficiency certificate of the future house. The construction company must deliver it to you during the drafting phase of the execution project.
In addition, of course, you must be solvent: have savings, a good job, a sufficient salary… On our page on mortgage requirements we explain what the basic conditions must be met for the bank to approve your application.
Can I request a self-promoting mortgage without owning land?
If you do not own land, financing the construction of your home will be much more difficult. Because it is a requirement that almost all banks ask for. Even so, there are some alternatives to carry out the operation:
- Request a self-construction loan that finances both the purchase of the land and the construction of the house. As we have told you before, only Hipotecas.com openly offers this option: it can cover up to 40% of the cost of the plot if its value exceeds 100,000 euros (check its conditions here). Now, you can also try to negotiate with other banks, although the chances of being approved are low.
- Contract a separate mortgage to buy the plot. It is unlikely that they will give it to you, because banks do not usually approve these operations. However, you have nothing to lose by trying.
- Buy the land with a personal loan. You will pay a higher interest than with a mortgage (over 7%), but it can be an alternative if the other options fail.
Keep in mind, however, that financing the land will force you to pay more money each month. For this reason, we advise you to do numbers to ensure. That you do not dedicate more than 35% of your income to paying for the land and self-promotion. Which is the maximum debt ratio recommended by the Bank of Spain.