Owner Builder Construction Loans and How They Work
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/she is the property owner and the general contractor of his land too. An Owner Builder has a lot of responsibilities apart from supervising the activity on his land.
He/she also has to manage the budget.
What is an Owner Builder Loan?
It is usually believed that owner builder loans are extremely difficult to get. However, the task isn’t an impossible one. If you have equity or savings, it becomes easy to get some financial help from local lenders. You can also sign a deal with a guarantor and provide additional security to your property if he is willing to do so.
Here are some lending guidelines you need to know.
How much can you loan?
About 95% of your total project expense:
The response will 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.
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 however 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 competitive interest rates.
You have to organise the cost estimates you’ve set for getting yourself a loan.
When you work with the best, the process becomes less tedious and you have less trust issues.