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? How do you arrange 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.
How Traditional Financing Works
To begin, we’ll arrange a visit with one of our mortgage brokers. 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.) The mortgage broker will make an assessment as to how much you can borrow, then provide you with what is known as a home building loan.
Once you have a loan approved, Lithium One will 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. At this point, your home is now complete and you have two mortgages, one from your old home and one from your new home.
Keep reading to find out how our custom in-house financing works!
How Our Custom Home Financing Works
When you build a custom home with Lithium One, you have the option to go through our custom home financing program. It differs from the traditional financing model in several ways. First, you’ll sit down with our builder and designer to plan out the type of custom home you want. We’ll then provide you with the cost to build a new house.
Next, you’ll arrange a visit with one of our recommended brokers. Just as with a traditional lender, they’ll discuss your finances, equity, and borrowing abilities before approving your loan. At this point, Lithium One will take a 20% deposit then begin construction on your custom home right away. There are no additional draws throughout the building process.
While construction progresses on your custom home, you’ll have the opportunity to sell your existing home. When your new home is complete, you can allocate the 20% deposit you provided to Lithium One as part of your down payment. At the end of the process, you have a new home and one mortgage.