Construction Loan ukBuilding loans Great Britain
Home mortgages are less attractive than normal home mortgages, but they are available from many creditors. When you think of construction, this page will describe the fundamentals of these loan. Construction loan is a short-term loan for immovable assets. They can use the loan to buy lands, you can rely on properties you already own, and with some programmes you can even refurbish your current state.
This loan is similar to a line of credit: you lend only what you need when you need it, and you only have to pay interest on the amount lent (as distinct from a regular loan where you take 100% of the available cash in advance and begin to interest on the total immediately).
As a rule, during the construction period you only make interest repayments (or in some cases no repayments at all) on the basis of the amount you have lent so far. The loan usually lasts less than a year and is paid back with another "permanent" loan - you get the loan off as soon as the construction is completed.
Because building credits have higher (often variable) interest rate than conventional home credits, you don't want to keep the credit forever anyway. In order to withdraw the loan, you will receive an assessment and examination of the finished real estate and refinance yourself into a more appropriate loan. You have two options for getting rid ofthe temp loan:
You can use the resources from a building loan for almost any part of your project: purchase of the plot, excavation of a borehole, casting of the foundations, frame and finish. Just like most mortgages, don't rely on your lending 100% of what you need. Of course, you can put your coins at the tables, but if you already own real estate, you can use the real estate as security instead of using your currency.
In order to obtain a building loan, you must be qualified, just like with any other loan. This means that you need a good rating and favourable key figures (debt to revenue and loan to value). A steady salary also will help. Building credits are one of a kind because the building plan has to be approved by the building authorities. Are you expecting your creditor to ask for full detail about the project: who will do the work, how exactly will it be done (architectural drawing will help), what is the timetable, what are the planned expenses, will the proposed infrastructure comply with your site rules and regulations, and how much will the building be valued at the time of construction?
Building sites are known for delay and surprise, so give them some leeway.