Anybody wanting to build a new house will discover that the financing can be quite complicated. The sorts of problems that are likely to arise are around the timelines for the build, price variations during the contract, price variations during the planning and any disputes that occur along the way including non-completion.
The contract for the financing for a new build need to be very carefully drawn up to allow for potential problems and changes, and for this it’s pretty important to have a smart mortgage broker assisting. A good mortgage broker will understand all the tricks that the builder will likely employ, and the best way to mitigate any problems likely to arise during and after the contract period.
At first glance arranging finance for a new house looks to be a simple as arranging finance for ordinary house purchase, in that there is an agreed date of handover and an agreed price. The mortgage broker will need to make certain that the contract is able to cope with any changes along the way included minor additions and changes and timing.
The finance for any house built is generally drawn down at certain milestones during the project. The first milestone is obviously at the time of section purchase, but assuming that the client has a section then the first real milestone is at the signing of the contract when a deposit will need to be paid, generally around 20% of the purchase price. If you’re looking for Porirua mortgage brokers click here. The second milestone is generally once the concrete floor has been laid, and that may also be around 20%. The third milestone is generally when the frame has been erected, the roof put on and the external cladding and windows and doors installed so that the house can be locked up. This is also generally 20%.
The 4th milestone can be when the house has been fully lined, and all the plumbing and Electrical work complete in the house plastered and painted and ready for handover. A good mortgage broker will know everything to watch out for at each of these milestones, and will be able to advise the client accordingly. When you need the best mortgage brokers Otago click this link. They will also recommend withholding final payment until sometime after the householder has moved it, in case there are any problems or issues to be addressed.
While this is a more extensive process then simply getting finance for a new house, it is not that complex if a good mortgage broker is used, as the mortgage broker can provide valuable advice as well as managing the process effectively and protecting the client from any financial issues arising.