Most people have to organise the finance to build their new Home. Cavalier Homes look at what is likely to impact on your budget, and the options for borrowing.
Work out what you can afford:
Before you launch into a building your new Cavalier Home, you should first work out what you can afford. This means having a realistic idea of your budget, taking into account all the other demands on your income.
Once you have an idea of your spending power you can start to look at locations and the Cavalier Homes range that suits your budget, have a look at www.sorted.org.nz an independent site that will help you organise money matters. It has tools and calculators to help you work out a budget and a loan repayment schedule.
Talk to one of the experienced Cavalier Homes consultants about your budget and what’s available to suit your needs. Cavalier Homes have 3 standard product ranges Aspire Range, Lifestyle range and the Luxury range, each range has been hand selected to suit a monetary value range without lowering the quality of the products and building materials.
Decide how much you will be doing yourself and how much you will be paying other people to do. Be realistic. Building invariably takes longer than you think. You might think you are saving money by doing it yourself but if you are not competent in project management you could end up paying more overall and a whole lot of unneeded stress. Let the Cavalier Team take this pressure away from you and do what we do best, Build beautiful, functional homes.
Armed with this information you should get a reasonable idea of how much the total project is going to cost. Be prepared to prioritise. Make a list of what you consider ‘must haves’ and what might need to be reconsidered or deferred to stay within budget.
Effect of design features on cost:
The design of the house will affect building costs. For example, it will cost more to build a home with a complicated roof and exterior wall design than a simpler home. Interior design involving higher ceilings, or lots of walls, windows and doors will add to costs. Have a look at Features and materials for ideas.
The type of design detail will also make a difference to how much you will pay, one of our Cavalier Homes consultants will be able to work within your budget to produce something that suits your needs, within reason. Some design aspects will actually save you money in the long-term. Passive energy design features like orientation of the house and large north-facing windows will save you money in heating costs. Spending a little more on good insulation will also save on heating costs.
you need to start talking seriously to a bank, mortgage broker or one of the recommended Cavalier Homes lenders, talk to one of our consultants today about where to start.
It is becoming more common for people to borrow money from organisations other than banks. These are known as non-bank or non-formula lenders. If you have been turned down by the banks, this may be an option, but if you are a risky proposition for the lender, you are likely to pay higher interest rates and fees. They may lend a smaller percentage of the property’s value than banks usually provide, so you may have to top up the difference some other way.
However, non-formula lenders can be a good option for people who want to pay off their mortgage more quickly. Some of these organisations encourage fast repayment. They may provide budgeting packages and consultants to keep an eye on you. And they may have schemes to help your debt reduce, for example, having your salary direct-credited to your mortgage account.
Many banks will require you to have some sort of mortgage repayment insurance. This is usually achieved by assigning your life insurance policy to the bank.
A loan option to be wary of is a scheme whereby a middleman – for example, a real estate investor – buys a property and then offers you credit to buy the property. These schemes are known by a variety of names including wrap-around mortgages, rent-to-buy, lease options, vendor finance, or instalment sales contracts. The problem with these schemes is that you don’t own the property until you finish paying, so you can’t sell and move somewhere else, or refinance, and if the middleman goes broke you will lose all the money you’ve invested.
Contact one of your local Cavalier Homes consultants today to discuss your options on 0800 228 254