When applying for construction finance, you have the option of requesting financing for a plot of land to build on at a later stage or for a piece of land and the cost of constructing a house. For many, the latter may be too costly at first, but they want to get a foot in the door and start the process by securing a plot. Construction finance is a great way to get started on your journey towards owning a house of your own design, and it allows you plenty of time to save up and proceed with development when you are ready and able. To ensure that you are making the best decision for your future, it is smart to do a bit of homework and preparation for a long-term plan before applying for financing.
Here are a few things to bear in mind:
Financing: Land Only, Or Land And Building Plan
The option you choose to go with depends quite heavily on how certain you are of where you’re planning to buy land and whether or not you already have a building plan in the works. If you are looking at development villages, it will be easier to get a solid estimate of your costs in terms of land prices and average construction costs. Should you decide to opt for construction financing for just a plot of land at first, you do need to bear in mind that land rental costs will be charged even if you have nothing constructed on the land as yet. You should also discuss your future development plans with a construction specialist, who can advise you on costs involved in all building plans, physical construction work and legal paperwork involved.
Planning For Financing That Includes A Building Contract
If you are opting to request financing for a plot of land and all the work involved in constructing a house, the process is a bit trickier. You will need to ensure that absolutely every conceivable expense is included in the final building quote, as your financing will only cover the items listed. Also, bear in mind that the cost of building materials and labour may vary between the time of the quote and the time of construction – although the builders may absorb this if you secure the contract and proceed with building within a particular time frame. Anything that isn’t included in the building contract quote will have to be paid by you, in your own capacity, so be sure to think of any and all necessary aspects.
Are you unsure about the best course of action for your particular requirements and which type of construction finance will work best for you? Feel free to contact ZEP Finance to discuss your needs, and we will work out a plan to help make your dreams a reality.