How you can benefit from MMC’s

MMC (also known as smart construction) stands for Modern Methods of Construction.

This method allows for faster and more efficient building as it uses off-site construction in factories.  This makes mass production possible in a way that is not achievable when using more traditional methods.

It also has the backing of the government who is pushing to drive adoption of this method.  MMC is already prevalent in public building initiatives and this popularity is likely to transfer over into the commercial housing market.

What is the process for getting a mortgage for an MMC property versus a traditional build?

Key to consider in this respect is whether it is more difficult to secure a mortgage on an MMC property than it is a traditional build.

Of course, there are variations from lender to lender and each will have different requirements and different terms and conditions in place.  A big consideration for lenders is the quality of the property (and this applies to both MMC and traditional builds), however these concerns may be greater for MMC properties and therefore make it more difficult for those self building to secure the finances they need.

Generally speaking it pays to approach a building society for self build mortgages.  Seeking help from a qualified mortgage advisor can be a good route to the best deals if it is proving difficult to secure the finance needed.  Building societies, particularly those that lend in the self build market are likely to be more receptive as they are more experienced and better equipped to accurately identify any potential risks of a self build mortgage.

A mortgage advisor is able to guide borrowers regarding what documentation is required.  However, for those approaching lenders directly it pays to be prepared and have all the required information in p lace.  The same documentation that is needed to apply for a mortgage on a traditional build is required along with several other documents.

Borrowers will need to see; construction drawings and specs, total project cost estimate (including fixed price contracts where possible), copies of planning permission.  In addition, they will also need to see Building Regulations Approval (including SAP calculation), structural warranty, a site report and in some cases the architect’s professional indemnity cover.  New Homes Warranty (10 year insurance policy) is required and the mortgage lender will provide a short list of who their acceptable providers are, buildings insurance is required valued at equal to the build cost of the property (as a minimum).  In some cases, lenders may also wish to visit the site to undertake further checks.

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