Meet with your Personal Banking Officer.
Home Builder Loan
Call us and you will be connected to your Personal Banking Officer (PBO) who will guide you through all the steps to acquire a loan to build your dream home.
Your PBO will help you determine:
The maximum amount you can borrow.
Your ability to repay the loan.
Your source of downpayment and contingency funds.
In the process, your PBO will review your income, assets, liabilities, credit reports (if applicable) and assist in determining your source of down payment, such as savings and investments, and equity in your property/land or gift from family.
Upon completion of the application requirements, your PBO will submit your loan request for approval.
Your PBO will also discuss your monthly interest payment, which will be due when drawdowns commence.
Your contingency fund is an important feature of a Home Builder Loan, where money is set aside to cover unexpected cost changes during the construction process. It will be between 5-7% of your construction cost. The contingency covers unexpected price changes and costs passed on from the contractor. These should be few and low in cost, given the small buffer.
Upgrades in materials used and unexpected changes to the plan require additional equity injection from the borrower.
Ensure that you fully understand the architect’s plans: (a) Do you prefer an open concept layout for the living room and kitchen or do you prefer enclosed rooms? (b) Do you prefer one sink or two in the bathroom?
Ensure that you are comfortable with the layout of the rooms, the number and that the size of the bedrooms is sufficient for your family's needs.
Ensure that you fully understand the builder’s plans: Did the builder account for possible time delays due to unforeseen circumstances such as delayed shipments, supply shortages, weather conditions, etc.?
Carefully select materials for floors, counter tops, tiles etc. to match your style while staying within the allocated budget.
If the budget for materials needs to be updated, ensure it is done prior to construction and is accounted for in the total costs.
Changes/upgrades to materials during construction is one of the major reasons for cost overruns. Avoid overrun situations.
Any structural changes to the floor plan (interior or exterior) during the construction period will have to be pre-approved by government regulators.