Posts Tagged ‘Mortgages’

New Home Construction Mortgages – Self Build


Ben Schmidt of www.benschmidt.tv a Fredericton NB and Oromocto NB Real Estate Agent video blogs about New Home Construction Mortgages with Special Guest Shawn MacDonald Q – How do you finance a new home construction, when you are the contractor yourself? It's called a Self Build Progress Advance, and money is issued at different stages of completion. Below is an example of how it could be structured. At 40% completed – This is when the house is dry. Foundation, framing, roof with shingles, windows, doors and ty papered. At 60-70% completed – This is typically around the time when electrical is in and you're about to drywall At 100% completed – this is when the rest of the money is released and you are now in your new home, and paying a mortgage like any other. You pay Interest only payments on the money advanced, until the home is 75% completed. That's when you add your principal amount to your mortgage and you can start to build equity. Q – What does the bank want to see from me, the builder, before they'll lend me money – A deed or title to a peice of land, or the purchase and sale agreement for one – A copy of a quote for every stage of the building process – A copy of the house plans Q – How much money will the bank give me? When receiving all of the quotes, plans, and knowing the lot for the home, the bank will order an appraisal. The bank will lend out the appraised value of home or the estimated cost of building, whichever is less. If you have

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