Buying a home vs. building one from scratch involves different types and sizes of expenses. When you buy a house you might need the whole amount in one shot. But when you build a house depending on the expenses involved in each stage of the building process you might need different loan sizes. Self-build mortgages are therefore slightly different in their structure than conventional home mortgages. There could be multiple stages defined by the bank or lending institution. Here are the common stages in which loan amounts are disbursed-
- Purchase of the plot of land
- Laying of the building foundation
- Framework construction
- Plumbing, electrical and other hardware fixtures
- Finishing touches and furnishing of the house
When you buy a small product online you can compare the price of various online portals and get the best deal by using coupons from Couponobox. But when you choose a self-build mortgage how do you compare your options?
Check whether the lending institution offers the desired loan amount after completion and inspection of each stage or before the inception of each stage. This is probably the first thing to compare based on the budget you have at hand. Given that most of the lending institutions impose higher mortgage rates for the self-build loans than the conventional home loans make sure that you do a thorough comparison of the total price of the loan before choosing it.
Consider the LTV or loan to value percentage offered by the chosen self-build mortgage. If you have a very little budget at hand and wish to get a larger amount from the bank’s contribution you would need a self-build mortgage with a large maximum LTV value.
To understand the cost of the mortgage itself the money that you spend, you should also compare the cost for comparison between the shortlisted self-build mortgage options.
Finally, compare the initial rate and the subsequent SVR or standard variable rates applicable. This would help you understand interest rates that would determine your monthly installments in the long run.…