About construction finance.
There are options with Building Loans and Construction Finance. Construction Finance is offered by most banks and mortgage brokers, the interest rate is the same or close to the market mortgage rates, and is specifically used to fund the building of a new home.Once the building is underway, the construction loan is paid in agreed stages. Your contract with the builder may set out how much is paid at each stage.
The main difference between Construction Finance and a standard mortgage is that the full amount of the loan isn't paid out all at once, with Construction Finance progress payments are made through the build of your home, so you won't pay interest on the full amount until the home has been completed, while enjoying the capital value increase on the property from the day that builders walk on to the site.
During the project you only pay interest on the money already paid
out. This helps keep payments low while you're paying other costs
such as rent.
There are different requirements in terms of deposits for newly
built homes that are being built, while banks generally require a
minimum 20% of the value of existing property as a deposit, the
requirement is less for newly built homes. At Indelible, we can
assist with the arrangement of mortgage finance up to 95%.
A construction loan is usually on a floating interest rate(The interest
rate varies with the market but you can repay lump sums
whenever you like without any early repayment/break costs). So
whether you're ready to start building or still planning your new
home, there's never been a better time to get in touch.
If you're thinking of building a new home, a construction loan has
some great benefits to help get you into your new home sooner.
Key benefits: • 12 months conditional approval so you have plenty of time to find the right section and plan your build • Interest only during the construction period to help reduce your outgoings during the build • Up to 12 months repayment holiday to help manage your cash flow during the build - especially handy if you're trying to build and pay rent or an existing mortgage at the same time • No annual account fees for two years on any new credit card with hotpoints@ to help with those extra purchases Depending on the price of the new home or house and land package, and the region, there are many KiwiSaver advantages to building a new home as opposed to buying an existing home.For example, your KiwiSaver for your deposit, and potential access to a KiwiSaver HomeStart Grant. You have many options when you are considering building new, it is important for you to choose a company or bank that understands the construction process, and can work with you through the process. We have many recommended companies or most of the major banks also have Construction Finance solutions. We are more than happy to see you, even after hours.
Get in touch today and we'll arrange a time to meet up
(we can come to see you even after hours)
and get your building journey started.
0800 233 111
027 698 2855
