Getting finance to build your home can be quite stressful. One of the reasons for this anxiety is that most people think that getting pre-approval guarantees them the funds to build their home.
There are two problems with this as pre-approvals have limitations:
- A 3 month life span
- Not a guarantee for the funds
In order to get the final approval for your loan, you will need 3 important documents from your builder:
- Approved house plans
- The final tender
- Signed contract
The bank will need all three documents before giving you final approval for your loan. Sometimes before you get these documents you will have to go on a 6-12 month journey with your builder.
It is very important that you only use the pre-approval as a guideline and a rough budget to what you can afford and be sure to plan ahead.