It is not always easy to find the house of your dreams. Location, configuration, price… Prospective buyers are often forced to make compromises. When building a house, you have control over many parameters. But what do you need to know about the construction mortgage? What are the specificities of a mortgage financing for a new house? Let’s find out.
Construction loan: what you need to know
When arranging mortgage financing for an existing home, things are simple. You tell the mortgage broker what you want to buy, how much you want to borrow. If the price you pay is in line with the value of the house and you meet the loan conditions, they lend you the money. All you have to do is go to the notary to sign and you are a homeowner.
In the case of a self-construction, it is more complicated. In effect, you are being lent under the construction mortgage to build something that does not yet exist. The money of the self-build loan is therefore released in instalments, as the work progresses, and according to the bank’s evaluations, the interest is paid according to the disbursements.
If you have chosen to do business with a builder(Turnkey), the loan will be disbursed when the house is completed and conforms to the plans.
New Home Warranty
For a construction project (turnkey) to go well, it is necessary to make sure that the budget is respected, from the foundations to the interior finishing. Despite the care you will have taken in selecting the construction company, you must always anticipate unforeseen circumstances. Fortunately for you, since 2015 and the passage of Act 35 the New Home Warranty Plan has been adopted. This guarantee protects you in case of delay in the work or construction defect(APCHQ)
New home construction mortgage: compare offers with a broker
Building a new home is a journey that can be fraught with difficulties. The same goes for signing a construction loan. By contacting a mortgage broker, you will be fully informed of the products available to you and the offers best suited to your situation. Contact us without obligation to obtain the conditions of such a loan.
