Financing a Kit Home in Australia
Kit home financing is offered by a variety of companies. It is often referred to as Owner Builder Financing, and while the terms may be interchangeable, the loans may not be. Carefully choosing a kit home builder can be critical to the success of your financing as well as the construction of your dream home. A seasoned kit home builder will have many connections in the area of financing and should be able to refer you to a wide variety of companies that specialize in kit home building finance.
Many aspects of a home construction loan are predetermined by personal circumstances of the prospective buyer. These include how much you can afford for a down payment, how your credit is rated, and the type of monthly payment you can afford. So the place to start is your own personal financial records. Do you have any outstanding debts that have to be paid in order to free up funds for your monthly budget? Start there, by paying those off and reducing the outgoing debt of the household.
Shopping for a Builder
Before beginning the financing process, shop around for prospective kit home builders in your area. Build a relationship and go with the company that you feel most comfortable with and know you can trust to do a good job. As you begin to choose your new home design from the many that are available, you will then get an idea of exactly how much capital the project will take. The builder will then be able to refer you to local finance companies that specialize in kit home financing.
Working with the Lender
Once you find a kit home finance company that suits you, you will be asked to gather all of your personal financial information together and submit them with a loan application. The finance company you choose will then work up an offer for you and submit it to lenders. The number of lenders your information is submitted to will depend mostly on your credit history, the size of your down payment, and the cost of the home you want to build.
Once the lenders receive your financial information they will follow their established guidelines for creating new loans and eventually offer you a finance package to suit your needs. One very important factor in acquiring financing is the expected length of time for construction. Many lenders will build in deadlines that indicate when construction must be completed. Your builder will be informed of these time constraints if they are placed in your loan.
Playing by the Local Rules
Once you have been granted loan approval to complete the building process of your new kit home you still have to acquire permission to build from your local council. The guidelines for building can be very different in one area than they are in another. This is another reason you must be in a relationship of trust with your kit home builder. Some kit home builders will even submit your plans to the council and remove that headache from your list. Even if you have to submit a barrage of information the kit home builder you choose should help and guide you through the steps from financing your home to moving in.
