WHEN APPLYING FOR A BUILDING LOAN , YOU WILL NEED THE FOLLOWING : 1 . A credit record of 620-plus :
You can check your credit score using a free online service such as ooba Home Loan ’ s Bond Indicator .
2 . Draft plans for the
construction taking place : This includes approval by the municipality , the materials being used and the budget assigned to each portion of the project .
3 . A signed agreement :
Between yourself and your contractor of choice .
& REGISTERING A SECOND BOND
Should you wish to renovate , extend a home or even install alternative energy such as solar power at your existing home , you may need to apply for home loan refinancing .
4 . Proof : The banks require proof that the contractor is registered with the National Home Builders Registration Council ( NHBRC ) and is covered by Contractor All Risk Insurance Cover .
5 . A deposit : It ’ s advisable to
have a deposit of around 10 % in place should you not be approved for a 100 % home loan .
6 . A lien waiver : This is provided
by the builder to confirm that they waive all rights to the property , any materials and labour used during construction .
REFINANCING
The home will be revalued and your credit history and affordability will once again be reviewed . If you are borrowing a portion of the original home loan or accessing funds registered for future use , the funds will be made available immediately after approval . Alternatively , should you wish to register a second
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