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Also known as “ Construction Loan” or “Progress Payments Loan”. You buy the land at the very beginning of the build, then have a construction contract with the builder to build the house on the land. However, you (or the lender) make progress payments to the builder at certain stages of the construction (i.e., when the foundations have been completed, when the framing is up, when the roof is on etc.). until the house is completed (with CCC issued). You start to pay interest on your loan as soon as the land settled and your mortgage payments increase at each stage as you pay interest on any funds released by the lender.
The construction loans are exempt from the Reserve Bank of NZ restrictions. This means you can potentially build a new home with 20% deposit if it is an investment property and with as little as a 10% deposit for first home buyers. Certain conditions apply and we are happy to help with it.
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A fixed-price contract where the developer/ builder takes all the cost upfront and you pay the deposit (usually 10%) to indicate your interest in purchasing and pay all the rest of the money once the house has fully completed (CCC issued). You do not have to make mortgage payments until the property has been completed and settled.
This contract is exempt from the Reserve Bank of NZ restrictions. This means a 10% deposit for first home buys (20% deposit for investment properties) is required for a turn-key contract.
This contract is exempt from the Reserve Bank of NZ restrictions. This means a 10% deposit for first home buys (20% deposit for investment properties) is required for a turn-key contract.
- Buying off the plan means buying a property that hasn't been built yet or is still under construction. You make your decision to buy based on the building plans and designs, rather than the finished product.
- Pros and cons of buying an Off-plan property:
- One main advantage of buying property off-plan is the ability to secure the purchase at below market value.
- Small deposit and staged payments.
- An extended settlement period gives you more time to get your finance sorted.
- The risk in buying off-plan is that you are legally bound to complete that purchase once the developer delivers the project – so your deposit and your mortgage approval are tied up should you decide you want to exit the contract.
- Thinking of buying off-plan? Talk to us first.
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- If you are not relatively experienced in the construction industry (ie., site management, hiring, managing and paying all contractors, buying materials, health and safety on the building sites and being familiar with building codes), we would not recommend you to bind in this type of contacts.
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