When building your own home there are more risks involved, however in taking out a self-build mortgage you can overcome many of the financial complications involved. With a self-build mortgage the money is released in stages as the build progresses rather than a lump sum being issued. There are two types of self-build mortgage there is an arrears based mortgage, which releases funds in staged payments when each stage of the build completes.
Alternatively, there is an advanced payment option, which releases the funds before each stage of construction; this removes the need for bridging loans. There are usually five stages to this type of mortgage depending on the building work.