Ensure you consider your cashflow during the building process

Building can often be a daunting task however it can be beneficial. While borrowing calculations are similar, often banks/lenders will scrutinise building loans more. They need to be satisfied as to your costings and whether you have the capacity to cover any increased costs associated with building.

Points to consider:

1. How much can I borrow on the section value? This varies between banks/lenders and can often mean the difference between a loan approval and decline depending on your deposit.
2. A fixed price building contract will be required unless you have good equity in the property
3. The loan will be advanced by progress payments as the work is completed. Depending on equity this can often mean a visit by the valuer to assess the completed value. You will then need to cover interest payments as the money uplifted.
4. Any changes to the plan are likely to incur increased costs and you need to allow for this
5. You need to allow for basic landscaping eg driveway, paths, lawn as well as floor coverings.
6. The house will need to be completed and code of compliance issued as well as valuers completion certificate to get the final payment.

At Mortgages Made Easy we work through the project with you and guide you on who has the best options.

We will also consider cashflow during the building process and make allowance to cover this.