You have long cherished the dream of building your own home. Now you finally get the knot through: you go for DIY! It’s very exciting, because there is a lot involved here. Fortunately, self-construction has become easier but there is still much to arrange.
Think about the design and construction, but you also need to get financing around. How do you handle that? For self-building you take a mortgage on a house that has yet to be built. If you want such a mortgage, you must have your business in order. In this article you will read everything about the costs of building and financing. That way you know exactly how it works.
Costs for self-constructionWith self-construction there are all kinds of costs around the corner. These items can actually be split in two. You get to deal with expenses for the construction of the house itself. But that is not everything. You have to prepare yourself in advance for other extras.
Financing preparation: plan costsYou already incur costs before construction actually starts. During the preparations you will be confronted with so-called plan costs. You usually pay this amount before you take out a mortgage and you have to pay with your own money. Consider, costs for the design by an architect, having the building plans made and the application for the environmental permit.
Funding during construction: foundation costsThe foundation costs are all expenses you have during the construction for the realization of your home. You can finance this from your mortgage. There are three different types of foundation costs:
- Land costs: you pay for the lot and the transfer of ownership.
- Construction costs: you pay them to the contractor.
- Additional costs: for example, you pay for the loss of interest during construction and the connection of the gas, water and electricity supply.
Close mortgage for self-buildingStart on time with taking out a mortgage, because for self-building this often takes a bit longer. You can only apply for a mortgage if you have recorded all the arrangements for the construction of your house. What does the lender actually assess your application for? This is done on the basis of two points: your personal financial situation and the house value.
To take out a mortgage you always have to submit a number of documents. Think of your salary slip and an overview of your bank and savings accounts. But what about self-build? For this you need a few additional data during the mortgage application.
Additional documents mortgage self-constructionYou must provide a copy of the purchase / contract for the building plot or plot signed by all parties. You do the same for the purchase / contract for the house to be built. Do you not engage a project developer, and you have already decided to build your own house? Then you have to arrange more yourself. Below we explain what you should take into account in any case.
A reduction guarantee is mandatory for your mortgage. This ensures that your house will be phased out if your contractor goes bankrupt. Therefore check whether your contractor is affiliated with a building quality mark approved by authorized organizations. Remember that you must be able to demonstrate that the zoning plan is residential area. Here are few tips to get a contractor mortgage .
Furthermore, you must have the building permit before the start of construction in your pocket. You must also demonstrate with the outcome of the soil investigation that the soil is suitable and not polluted. Is there a leasehold? Then the lender wants to know when it has been bought off.
After the mortgage has been closedAfter closing the mortgage, the money comes in a separate pot: the building depot. From this depot the bills are paid for the realization of the house. When and to what amounts this goes you lay down in the purchase agreement.
Misty Jhones