Understanding The Financing Process
While building a new house can be a creative and exciting experience, it can also present some complicated financial questions. How do you estimate the cost to build a new house? What is the process for arranging a mortgage when you’re still living in your current house? How do you free up the necessary equity? The team at Lithium One can help guide you through this process. We’ve helped many others in Prince George identify their budgets, work with local mortgage brokers, and find the necessary equity. Our team will help you, too.
The Basics Of Custom Home Financing, Explained
Every project starts with a visit with a local mortgage broker. They’ll meet with you to discuss your finances, the cost to build a new house, equity, and borrowing abilities. (If you’ve ever arranged a mortgage in the past, you’ll know what to expect.)
Next, the mortgage broker will make an assessment as to how much you can borrow. This gives you an idea of how much you have to work with when building your home. It provides a maximum budget for the project and will help you understand how much you can afford to spend.
Once you have a loan approved, Lithium One can begin construction on your home. We take several draws throughout the building process – typically, one at the start of construction, one at the lockup stage, and one at the completion of the project.
Finally, at the end of the building process, your home is now complete and you have two mortgages, one from your old home and one from your new home.
How Lithium One Makes Custom Home Financing Easier
Although Lithium One has traditionally offered fixed-price contracts, due to fluctuating lumber prices and requests from our clients we now offer cost-plus contracts!
A fixed-price contract means the price we discuss with you is the final price you’ll pay. If you decide to make changes to your home as the construction progresses, we’ll discuss them with you and present you with a new price to agree on before moving forward.
That model doesn’t work in the pandemic, when lumber prices are changing day by day. In order to help our clients move forward with their building projects, we now offer cost-plus contracts.
A cost-plus contract means your new custom home will be priced at the cost of the project, plus an agreed upon rate of profit. This pricing plan allows you to move forward with your building plan as desired.
Let's Talk About Your Plans.
A good home builder can advise you throughout the process – that includes early planning stages like finding a lot or arranging financing. Contact us today to start the conversation.