Building a New Home

Building a new home often means you get what you want in a house. It can be both an exciting and challenging process.

Financing a new build can also be a bit different to financing an existing property. You may have a fixed price for your project or it may be on a charge-up basis.

You may have to make progress payments. Either way, you will need a finance option that is designed to meet your specific need.

So how does a new build loan work?

To get a loan to build a new house you will need to provide additional information to the lender that includes:

• A registered valuation of land and the projected value of the completed home. This will help you to determine how much you can borrow. If you are borrowing a large amount you may be required to get interim valuations as the build progresses.
• A fixed price contract from a registered builder.
• A copy of relevant building consents
• A copy of an all-risk insurance policy unless this is provided for in the building contract.

If your build is a labour-only contract, we will need to talk to the bank early. There may be other requirements you need to meet.

Construction loans from most banks are usually on a floating interest rate and offer 12 months’ conditional approval. While you are building you usually only pay interest on the money paid out.

Our mortgage adviser can take you through this process, help you with the paperwork and work with the banks to get the best loan for you.

If you are thinking of building, before you start looking at sections, give us a call. We can advise you on what you need to know and do, so when you get started, your finances won’t hold you back.