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I have recently build my own new house so I can share my experiences and ideas with you. There are some tips that I can share with you about the building process and of course the financing of your new build too. There are some people that claim to provide a ‘one stop shop’ for new build finance, but in my experience this limits you options. When we talk about “new build finance” we are talking about a concept – finance to fund the building of a new house. When you are building a new house it is always better to have someone on your side who understands the whole new build process and especially the way new build finance works. Lending criteria, terms, conditions and fees apply to this offer.
You’ll get an ANZ Home Loan Coach to support you through the buying process. Plus, we have a range of helpful tools available to you throughout your home buying journey. Whatever your situation may be, we can help put a solution together to help you pay off your home loan faster and pay less interest. “We recently had a simple two-storey home on a sloping site priced at $6000m², which two to three years ago would have been around $3000m². Looking to fine tune the structure of your home loan or work out how much you could borrow?
Work out your repayments
Over the Summer break, our contact centre and branch hours may differ to usual hours to enable our team to take a break with friends and whānau. To get the best experience on Kiwibank.co.nz, please use a supported browser. Depending on the amount you’re borrowing, you may need to provide a valuation. Read everything at least twice, and make sure you understand it! You don’t want any surprises - if in doubt get your lawyer to check over it. Our newsletter covers the latest market news including content from Tony Alexander, as well as tips for getting, managing and reviewing a mortgage.
It could also mean you pay more if your house takes longer than expected to build or if costs increase during construction. Don’t forget to read this bit All interest rates are subject to change without notification. TSB’s current account opening criteria, current lending criteria, terms and conditions, fees and interest rates apply. Your own cash contribution will be used first, then as major phases of the build are completed, payments will be drawn down from your loan and paid directly to the builder. You’ll pay a deposit up front, and then when construction is finished you’ll pay the balance, so you don’t need to worry about making progress payments throughout the build. A Homestar rating recognises design elements that enable homeowners to keep their homes warm, dry, well ventilated and resource efficient.
Where do I start ?
You can structure your loan so you can draw down funds to suit this schedule. When you’re approved for a home loan to build a house, you won’t have to take the entire loan out at once. By not drawing down your full loan in one go, you'll save on interest payments.
In all cases it’s important to check whether the contract includes earthworks, fixing the home to the land and connecting all services, such as water, stormwater, sewerage, electricity, phone and internet. Once again, be sure to check what is fixed price versus an estimated PC sum, so you can allow for cost over-runs. It’s not always possible to cost everything precisely before the build begins.
Three ways an ASB loan can help with your project
You are responsible for project managing the whole building process yourself if you have labour-only contracts with the tradespeople you hire. The tradespeople will only be responsible for the trade you have hired them to complete. If you are thinking of building, we recommend that you talk to one of our financial advisers to make sure you get the right structure, interest rate and access to funds, to meet both you and your builders requirements.
Depending on the type of contract, we may lend up to 90% of the construction contract price². During the project, you only pay interest on the money already paid out. A construction loan is usually on a floating interest rate, which is great if the current interest rate is low.
There are a few options you can explore to help fund your build project. Contact us to talk through the steps involved to bring your building project to life – we’re here to help. It should be a time when you focus on the project of building your new home, not stressing about the finance. I would assume that the person at the bank had not even thought about how stressful and frustrating this would be. They would hide behind the fact that this is bank policy and probably do the same for the next finance application for a new build too.
Relocatable contracts refer to existing homes that are relocated onto a section you already own or have recently purchased. Prebuilt or prefab contracts refer to a new-build that’s partially or fully built in a factory and trucked to your section. The term kitset home is sometimes used for partially complete pre-builds. When you’re building a home, the details in the construction contract are vitally important. Before signing anything, it pays to get advice from a lawyer with new-build experience. To avoid nasty surprises later on, make sure you understand all parts of the contract and check that everything about the build is included.
The next downside would be the houses are designed in bulk, meaning there are little changes between each home. This can result in the homes lacking in that quirk or personality that is sometimes found in the old houses. The ultimate cost of a new build will depend on a number of factors, from site size, materials, geographical area, how many houses in the development and even the developer. With a little planning and some helpful home loan tools, you can shorten the length of your loan term, reduce the amount of interest you pay, and save money in the long run. Whether you’re after the certainty of a fixed term, the flexibility of floating, or a combination of both, we have a range of competitive rates to offer.
You can usually change to a fixed interest rate home loan once everything is complete. Through NewBuild you have access to competitive floating and fixed interest rates. This can save you thousands on interest costs during your build. You are eligible for these rates with a NewBuild progress payment loan or a turnkey build. You may also qualify for $3,000 cash back if your build has a Homestar rating of 6 or higher . Fixed price contractsfor building or renovating usually set out a schedule of progress payments, which you pay when your project reaches certain milestones.
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