If people are an adventurous person, a DIY expert or just a pernickety homebuyer, it could be an exciting prospect to think of building their own home. After all, they get to call all the shots when they want to create their abode. This means that individuals can decide the precise layout, specify the exact number and type of spaces, handpick all the finishes and, for that matter, even install an indoor pool, an aquarium wall or a stairway slide.
Although it may sound exciting to create a one-of-a-kind home from the ground up, funding such a massive undertaking is an entirely different storey. Most homebuyers don’t have enough cash left to cover their custom home building expenses. Sadly, it is easier to claim that than land a self-construction loan.
People don’t have to be millionaires to build a house of their own. People may be fortunate enough to have a big pot of cash at their side, but if not, they have access to several other finance options. A combination of two or more of these may be the best way of making their dream home a reality.
Here are a few self-build finance options:
Sell the current house:
If people can live in temporary accommodation while they are being built, they can sell their existing home for cash-free. This may mean, for example, bunking with a parent, staying in a rented property or a caravan on the spot. Only make sure that people include temporary lodging expenses in their budget. It may have built up a large amount of equity in it, based on how long people have owned their home for and where they live.
The key difference between self-build mortgages and standard mortgages is that the majority is released to people in phases after people borrow money to purchase properties, so there is no actual property for the lender to use as collateral for the loan.