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March 2016's Property Gazette
Published by Scott Miller
Thinking of building? Look into your finance options carefully
You may be wowed by builders’ 5% deposit options, which is common in the market place. However it is slightly misleading. Although they (the building company) may only require a 5% deposit you will be highly unlikely to secure finance for only 5% especially on a build. Ask yourself the question where is the shortfall coming from?
In reality you will likely need between 10 – 20% deposit depending on your situation. We recommend talking to us before you begin looking for builders so you are armed with a pre-approval from the lender and know what your budget is for the build.
Working out your finance options
When you build, your home loan is approved for the full amount, but you draw it down in instalments as the building work progresses.
Therefore, it is essential to get a fixed priced contract which sets out a progress payment schedule.
Building is a very exciting process when armed with the right information and realistic expectations on not only what you can borrow but the whole build process.
Advanced Mortgage Solutions have helped hundreds of people secure the finance to build their new home, call us today to find out how we can help you.