Building a house requires many ventures, primarily financial ones. The overwhelming majority of investors decide on a mortgage, ie a financial product offered by banks for a specific purpose. The mortgage for the construction of a house is paid out in tranches, and not – as in the case of a mortgage for the purchase of a house or apartment – in the form of a one-off transfer to the seller’s account.
The average time needed to build a house is two years and this period is respected by most banks. In practice, this means that the proverbial will receive subsequent tranches after the completion of specific stages of construction. On the one hand, this is a beneficial activity for the investor, mobilizing for the implementation of the task, on the other hand, it is a considerable impediment, blocking the possible extension of the house construction, most often resulting from unforeseen random situations.
Home loan – which one to choose?
The amount of mortgage for the construction of a house can be 100% of the investment value, and even slightly more, as many banks also include costs around loans. For mentioned earlier, this means that with one loan he will be able to finance the purchase of the plot and the construction of a house.
Most banks only require a building permit, although there are units in which a copy of the contract with the main contractor is also required.
When planning a mortgage to build a house, you should carefully examine the contract. If any provision is unclear or incomprehensible, it is worth asking the bank employee for clarification. Who asks not stray. Entries in the contract are mandatory for both parties. In addition to specifying the payment of subsequent tranches and their amount, the document also contains information about the situation in which the client will lose creditworthiness and construction will stop at the site.
Bank loan for building a house
The bank has the right to control the course of work. Both public and commercial entities use this alternative. Some banks send their employees to visit and evaluate the implementation of the venture, this activity – unfortunately – involves additional costs charged to the borrower. Fortunately, most banks require only current photos and copies of the construction log. It may also be necessary to submit invoices, however invoices covering 100% of the investment are rarely required, most often documents covering half of the funds spent are sufficient. In some banks, a copy of the subcontractor’s cost estimate is sufficient.
During the construction of the house, ie for two years, the borrower may use the credit grace period.