Many people dream of buying or building their own home, but unfortunately not everyone can afford it. The solution in this case is to take a mortgage from a bank. Find out how to take a loan to build a house step by step?
How much does a loan to build a house cost?
At the very beginning, it is worth considering how much the loan will cost. Another issue is how much credit the banks will want to grant. In this case, you can use the online creditworthiness calculator. Of course, the result obtained is an approximation, which should be remembered. It is good to check the amount of the mortgage loan installment. You can find simple loan installment calculators on the web for this purpose.
Loan for the purchase of a construction plot
People who do not have a building plot must of course purchase it. Fortunately, many banks offer mortgage loans for the purchase of land. It’s a good idea to separate the land loan from the house-building mortgage. In many cases, at the stage of looking for and buying a plot, it is difficult to meet the requirements for obtaining a loan for building a house. It is better to take a loan for a plot of land, and only then a second loan to build a house.
Of course, you need to have a sufficiently high own contribution. Currently, it is 20% of the plot value. There are, however, some exceptions to this rule.
Loan to build a house
Having a construction plot in your possession, you can apply for a home construction loan. For this purpose, you need to prepare some documents – ID card, income certificate, bank statements or PIT declarations. Documents on the plot itself and the planned construction are also needed. In general, these are a current excerpt from the land and mortgage register, an excerpt from the land register regarding the status of the plot, construction logbook, plot purchase agreement, land development and development decision, building permit and construction design together with the appraisal and construction plan.
How to get a loan to build a house – from submitting an application to paying money
After completing the documents, you can submit an application to several banks and wait for a loan decision. In this case, it is not worth limiting ourselves to just one or two banks. In general, applications are made to at least three banks which offer the best conditions in each case. It is worth knowing that submitting the application is not a declaration and does not oblige you to take a bank loan.
Banks currently have a maximum of 21 days to process a loan application. When the decision is positive, the potential borrower receives a proposal for the terms of the loan, i.e. its interest rate. If the decision is negative, the bank must of course justify it. You can also appeal against such a decision.
After receiving a positive credit decision, all you need to do is sign the contract and wait for the payment of money. They are disbursed in installments. The bank checks from time to time whether the funds paid out are used in accordance with the construction plan and schedule. If so, the tranches are disbursed as scheduled.
How much time do you secure to get a home construction mortgage?
The waiting time for a loan decision depends on the selection of banks. Banks with a better offer have procedural problems, which results in an extended waiting period for the final. Weaker banks will probably be able to analyze your case faster. I recommend to my clients that in the preliminary contract they assume the time to obtain a loan in the range of 2-3 months. It may seem exaggerated, but remember that you can’t predict everything. This period gives time to properly prepare to submit an application for a mortgage for building a house, go through the process, the loan agreement and freely sign the final act. Too short a period in the preliminary contract may result in nerves and the need to choose the fastest bank, not the best in terms of price.
Cooperation with a credit expert
There are two ways to apply for a mortgage to build a home. You can act alone, which, however, requires a lot of attention, learning and still be associated with the risk of making a whole lot of mistakes. You can also outsource the service to a credit expert. The correctly chosen one will help you save time, money and indicate what mistakes should be avoided in order to get a mortgage to build a house. Expert help is free for you. The salary is paid by the bank where you take out the mortgage. The offers will be exactly the same as for the person who would handle all the formalities in person. How is it possible? Intermediaries are an additional distribution channel for banks. The bank does not bear the costs of full-time jobs, insurance, dismissals, holidays, offices, cars, gasoline, lawyers, advertising and dozens of other minor costs.