Owner Builder Construction Loans and How They Work

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Who is an Owner Builder?

An owner builder is the one who usually initiates or supervises activities like renovation or
construction on his land. He is the property owner and the general contractor of his land too.
He has a lot of responsibilities apart from supervising the activity on his land. He has manage
the budget and also hire subcontractors that shall further lead the project.
What is an Owner Builder Loan?

It is usually observed and thus, believed that owner builder loans are extremely difficult to get.
However, the task isn’t an impossible one. If you have equity or savings for your land, it
becomes easy to get some financial help from local lenders. You can also deal with also sign up
a deal with a guarantor and provide additional security to your property if he is willing to do so.
There is a long and tedious procedure along with some lending guidelines you need to know.

Let us talk about them.

How much can you ask for?

 About 95% of your total project expense: The response shall vary from case to case.
However, it is only applicable licensed owner builders who are carrying out a renovation
or construction activity on their own property.

 60% of your project expenditure: This is applicable for an individual who is NOT an
owner builder. In such a case, the loan is limited to 60% of the total value of your land
plus inclusive of other expenses that come under construction and renovation.

 100% loans:If you yourself are a guarantor, you can contact few lenders to get 100%
expenses for your land inclusive of the construction activity.

 Discounts: If your case is an exceptional one that satisfies the norms formulated by
some money lenders, then you can get professional services in competitive prices.
Moreover, your land can also qualify for negotiations and discounts.

A lot of firms provide you owner builder loans under the above mentioned criteria. The criteria
can be different for different firms.

How can you apply for an Owner Builder Loan?

Loan providing firms and mortgage brokers are expected to know the in and out of the process
of building new homes. They also keep a detailed knowledge about what banks can provide you
competitive interest rates and which all can approve your application of loan. You have to
organize the cost estimates you’ve set for getting yourself a loan. A bank can facilitate you with
mortgage brokers and help you do it. A proper bank can/has to provide you with a list of owner
builder lenders that can suit your choice. When you work with the best, the process becomes
less tedious and you have less trust issues.

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