How the Scheme works
There are six stages in the application process:
Stage 1 – Local Connections Assessment
The first stage is for you to complete the Local Connections Assessment Form, which will allow us to confirm that you have a local connection and are eligible to proceed to the next stage.
This is a pilot scheme with limited funding availability and only five applicants will be able to advance to the next stage. Applications will be dealt with on a first come first served basis.
Stage 2 – Financial Checks
At this stage you will be contacted by the Broker, One 77 Mortgages, who will carry out initial credit and affordability checks.
One 77 Mortgages are a completely independent, fees-free mortgage and insurance broker covering the whole of the UK. They specialise in the self-build sector and will be delighted to assist with your new project at Graven Hill.
Stage 3 – Graven Hill Village Development Company Ltd
If you have not already been in touch with Graven Hill, they will now contact you to help you identify a suitable plot from their mix and match homes. You will work with Graven Hill to explore the options available and an off-plan valuation will be agreed. At this point you will need to pay a reservation fee of £500.
You will now also need to appoint a solicitor and pass these details onto Graven Hill.
Stage 4 – Mortgage application
The Broker will then refer you to a panel of lenders. Please note that the maximum mortgage is £450,000 for this scheme. You will then apply to a lender for up to a 95 per cent loan to value mortgage that we will indemnify up to 20 per cent. If you are successful you will be offered a firm mortgage offer by the Lender.
Most lenders will only offer up to a 75 per cent loan to value mortgage on self-build properties, so by offering this indemnity, Cherwell District Council has made it possible for them to offer up to 95 per cent.
Stage 5 – Build Process
You will then exchange contracts with Graven Hill, which sets out the key responsibilities and contractual arrangements of the scheme. At this point, the you will need to pay Graven Hill a 5 per cent non-refundable deposit (less the reservation fee) and provide evidence of the firm mortgage offer.
The majority of mortgage offers are valid for a period of six months and after this you will need to arrange an extension with the lender. Due to the relationships that have been developed for the Graven Hill site this should not pose a problem; however, the extension is not guaranteed and is subject to your financial position not changing for the worse. An example would be if you took on a new credit commitment, such as car finance, in the interim.
Regular reviews will be undertaken by Graven Hill with you during the build process.
Stage 6 – Mortgage Advance
Once the property is completed, the lender will value the property in line with the off-plan valuation. The lender will then advance the 95 per cent mortgage to your solicitor and the pre-approved 95 per cent loan to value mortgage is complete.
Ownership of the land and property transfers to the you as the new owner
The 95 per cent loan to value mortgage is supported by an up to 20 per cent indemnity from Cherwell District Council to offer lenders reassurance. This indemnity will remain in place for five years with the (up to) 20 per cent indemnity and this may be extended for a further two years if the mortgage is in arrears in the last six months of the initial five-year period.