Finance - the first thing you need to build a home.
FirstBuild has built a strong relationship with NewBuild (OK our names sound the same, but we’re completely separate companies), New Zealand’s best broker that specialises in supplying finance exclusively to people building a new home.
We talked to the guys at New Build and said to them…. “What makes you guys the best in NZ for getting finance for FirstBuild clients?”, and they said…
Here’s a brief overview of what NewBuild can offer you that your bank may not be able to do for you. We specialise in getting our clients into a new home with less deposit, and less stress:
1. The loan is a standard bank loan through Sovereign/ASB and the interest rates will be very competitive
2. Our lending criteria is unique to NewBuild (only available through NewBuild directly)and it helps many more clients get approved to build
3. We will consider lower-deposit builds, even during the current Reserve Bank restrictions. On a case by case basis, many clients are approved with as little as 5% deposit* over house and land – including eligible Kiwisaver – any subsidy may also be used (but the subsidy does not form part of your minimum 5% deposit ) and we can use the equity in an existing house. The Reserve Bank exemption permits new construction loans with a lower deposit.
In addition to client funded build loans, NewBuild may also be able to assist with Builder funded “turnkey” by also offering as little as 5% deposit, moreover, if the title issued and the client’s loan offer has no conditions, we can document the loan and as long as the house is completed within 12 months, any changes in credit or the clients financial situation will not impact on that settlement once the home is completed. This provides a builder will a far greater certainty of settling a “turnkey” upon completion.
4. If a client owns a home and wants to retain it as an investment we may be able to use this home as security and fund 100% of the land and build. As specialists in this field, we can also help structure loans if clients want to hold their existing home just long enough to start the build – short term bridging (so they only have to move once).
5. Our construction loan is fully managed taking so much of the stress of building away from clients.
6. Unlike most banks that require you to pay up to several thousand in valuation fees, NewBuild charges a one-off fee to fully “project manage” the financial aspects of the loan for $1,000, making the building loan less expensive in most cases.
7. We will allow for the option of not making construction loan interest payments until your home is completed – we call this “Client Turn-Key”, so you don’t have to pay rent and a construction loan at the same time. The interest rates can be negotiated on completion. (For an understanding2 of Reserves click here). Please note the Reserves are not NewBuild or Lender fees; they are additional funding reserves to ensure clients have sufficient funding to cover interest costs and any changes/variations made to the contract along the way. All unused reserves belong to the client – every cent.
8. We ensure clients have additional funding set aside to help cover reasonable unexpected costs along the way, but whatever funds they don’t use become theirs at the end of your build to use as they wish.
NewBuild, as New Zealand’s only specialist Construction Lender, offers a bank-funded home loan for either:
A Design and Build progress payment loan (where you find the land and you design your own home). You will be provided with a Sale and Purchase Agreement for the land purchase from the land owner and a Build Contract from the builder.
A full turnkey loan where your builder is selling you a land and build package to full completion (you do not need to make progress payments). You will be provided with a Sale and Purchase Agreement for the house and land purchase from the builder selling the house & land package. These require us to fund the clients on completion of the build, and we will fund the builder for the land and build per the “spec loan” as shown below.
Spec Builds (non-bank funded) are available to our preferred builder relationships. We will fund as high as 75% of valuation less GST. We will fund each claim up to 75% LVR, less inspection fees and capitalised interest. Our loan does not have prepayment penalties, making it very competitive on cost, and while the rates and fees are ant non-bank rates, generally, the structure of a Spec/Turnkey loan will mean the actual carrying costs of these builds is comparable to a client funded progress payment loan.
Whichever way suits you, we can offer a deposit as low as 5%, and neither option requires loan repayments until you’ve moved in.