Building Loans

Multi Choice Building Loans

Building your own house should be a happy family memory where you get the wonderful opportunity to express your individuality by designing the exact house you want to suit your lifestyle. However, it can also be a long and expensive process if you get it wrong! At Multi Choice we know just how daunting the process can be for anyone building but particularly for those who have never built before. So we’ve provided a step-by-step finance guide to help you embark on the journey. The idea of building starts in one’s mind with mental pictures of what could be, the process however, starts with finance.

What is a Construction Loan?

Construction finance is quite different to a standard home loan primarily due to the fact that the lender only has security over the land whilst they are asked to fund the end value of house and land. In order to limit their risk the lenders do partial drawdowns of the agreed total loan and pay the builders normally over five stages of the construction as each phase is completed. The borrower is only charged interest on the portion of the loan that has been drawn down. The construction loan is set as an interest only loan during the construction and on completion of the building the lender converts the construction loan to a normal principal and interest loan.

Potential cashflow challenges whilst building

One of the biggest challenges to building is having to fund the existing mortgage whilst paying for the new loan on the building loan. Progressive interest only payments during construction will help your cashflow a little but you will need to be careful with your budget if your finances are tight because builders notoriously take longer than planned. Ask your mortgage broker if you can have your existing loan changed to reduce your repayments to the absolute minimum by converting your existing loan to interest only or possibly extending the term.

How our Brokers help

Here are just some of the ways that our Multi Choice mortgage brokers will help you achieve that building dream.

  1. We assess your current financial situation and your building dreams and then give you expert advice on how best to achieve that building goal.
  2. We compare all the lenders with up-to-date software and then use our experience and expertise to link you up with the right option whilst negotiating with the lenders for their best offer.
  3. We then do all the paperwork for you at a place and time most convenient for you in order to get your loan approved.
  4. We handle everything until the loan settles and you become another one of our very happy customers who has been wowed by amazing personal service which will continue for the life of the loan as we continually pursue the lenders for their best deal for you.
  5. Free advice. The service is totally free as the lenders pay us for introducing loans to them which doesn’t affect the deal you get from the lender.

Whatever your circumstances, your Multi Choice broker will find the deal that’s right for you from a choice of many lenders. We can arrange for a mortgage broker near you to get in touch to discuss all your options and to help you make important financial decisions which always stem from knowledge of what is available or possible.