Would you like to build your own house? Buy Land and Build a Custom Home.
It will be the explanation from STEP 10 to STEP 12 "Delivery of the building" on the 4th day today.
Mortgage Contract and Construction (approximate period: about 4-12 months)
STEP10 "About Mortgages"
Here, we will explain the mortgage loan when you purchase land and build a building with a custom house. If you decide on the land and building plan, you can know the specific amount of money you need to borrow. But the first thing to note is when you buy a house that is already completed or when you purchase the land and then build the house, by each cases, the cash flow is different.
As we mentioned a bit in "STEP6: Land Purchase/Contract", mortgages are generally issued at the time of building delivery, so in the case of custom-built homes, land payment comes first. In some cases, it may not be possible to make a loan for the land and building together, and the construction cost of the building is usually paid in several installments between contract and delivery. Therefore, there are cases where money cannot be prepared at the timing of payment.
In such a case, it is necessary to consider a "bridging loan" that borrows money on a bridge until the mortgage is executed. However, since "bridging loan" are not handled by any financial institution, the point to be considered is whether or not a "bridging loan" can be used when selecting a mortgage. In addition, please note that the "bridging loan" also incurs various expenses and interest when borrowing, and that interest is generally higher than that of a mortgage loan.
And, it is possible for a financial institution to transfer the loaned money directly to a real estate company or a construction company, but before you apply, be sure to confirm with the financial institution that "the money can be transferred by the due date." Depending on the construction company, it may adjust the payment schedule, so please consult in advance. Now let's talk about interest rate types for mortgages. There are two main types: "fixed interest rate housing loan" and "variable interest rate housing loan".
Fixed Interest Rate Housing Loan
A type of loan, where the interest rate of the loan does not change from the time of borrowing to the end of repayment, represented by Flat 35. Interest rates do not change, so if you borrow at a low interest rate, you will not be affected even if interest rates rise in the future. Also, because the repayment amount is fixed, there is an advantage that it is easy to make a lifelong financial plan. However, even if interest rates decline in the future, you will not receive the benefits of low interest rates. In addition, there are types that have fixed interest rates for a certain period, and are generally called "fixed interest rate selection type" or "fixed period selection type".
Variable Interest Rate Housing Loan
A type in which the interest rate of a loan changes depending on the financial situation. The interest rate is reviewed every six months, but the repayment amount is generally the same for five years, and even if the interest rate rises, the new repayment amount will increase up to 1.25 times the previous interest rate. When the interest rate is low or falling, there is a merit that the interest rate is low, but when the interest rate rises sharply, it will be affected. As we mentioned in the previous “STEP2 Financial Plan”, it is important to think that you can repay easily according to your life plan, but you often have a hard time deciding which one to choose. Many construction companies are familiar with mortgages, so it's a good idea to consult with them first.
And the key is to make sure in advance that you can prepare properly when you should pay the money.
STEP11 “Construction (Starting → Upper building → Completion)”
Since the construction contract has been completed and the construction confirmation certificate has been issued, the construction work has started, but it is not only waiting for completion.
There are many things to do, such as ceremony of sanctifying ground, framework completion ceremony, and greetings to neighboring residents.
It is also recommended to actively visit the construction site. You can see how your house is being built until it is completed, and your attachment to your home will increase. Also, as a result of being in close contact with the craftsmen at the site, some people said, “I had them create a shelf for my work,” and “I also responded to sudden changes in plans.” By seeing the faces of the ordering side and the construction side, you will be able to create a more satisfying home.
House Delivery and Move-In (approximate period: about 1 to 3 months)
STEP12 "Delivery, Moving In, and After"
Before the delivery after the construction is completed, we will check the building with the person in charge of the construction company, the construction manager, etc., for make sure that the floor and walls are clean and free of damage, and that the fittings move smoothly. If there is a defect, make it clear when to fix it, make sure to confirm in writing to avoid "said or not said".
Apart from that, there is also a "completion inspection" by the specified administrative agency or a third party based on the Building Standards Acts, and if you pass this safely, almost all procedures are completed. After repairs such as defects are completed, it will be finally handed over. After receiving your house key and warranty card, your dream home will begin. However, some problems may occur while living. Don't forget to check after-sales maintenance, such as "when is the periodic inspection" and "how long is the free compensation period?"
In some cases, there may be a request for an "open house" in which the construction company will post the completed property to the general public after construction.
While opening as an open house has advantages such as discounts and services, it may also have disadvantages in terms of damage and dirt when visiting a third party, and crime prevention. It's a good idea to have a discussion in advance to avoid trouble later.
This time, we explained the flow to orthodox move-in, but by knowing such procedures and setup in advance, we think that you could understand where you want to spend time, how to efficiently waste and what you need to be careful about. If you are thinking of building a house in the future, please refer to it.
Arrows International Realty Corp.