BUILDER MORTGAGES — Cont’d from page 59
“Everyone saves money in that situation, in all kinds of different ways. It’s just such a win-win.” • Self Build mortgages are designed for people who have extensive experience in construction trades and who can complete all or most of the build themselves. Advances are paid at
• Ready to Move (RTM) mortgages are for those who are buying a mobile home that will be moved to a permanent location, or a modular home that will be assembled on site. • Contract builds are designed for buyers who are paying a builder or contractor to oversee construction. The contract outlines a schedule of payments and funds are advanced as each construction stage is completed. For example, there might be six draws in all: A deposit and fixed amounts that are paid when the basement is poured, when the roof is on, when the mechanicals are installed, and so on. Buyers are required to make interest payments on the mortgage during the build and begin making payments on the principal when they take possession. • Assumption mortgages are only available with certain builders, and there are benefits to both the builder and the buyer, with savings on appraisal, registration and legal fees. SCU extends an interest rate guarantee for nine to 12 months, so if rates rise during the construction period, you’re locked in at the lower rate. Conversely, if rates fall, you still get the lower interest rate. In this case, the builder has a mortgage at SCU on the property, and title is transferred directly to the buyer. Normally, a deposit is made to the builder upfront, but there are no draws during the construction phase. “We’ve partnered with some really fantastic, really well-known builders to provide everyone with sort of a win-win in that our business and commercial lenders are working with our consumer lenders to create this ease of transaction for everybody,” Bart says.
different stages of construction and members are required to pay interest on the amounts advanced.
IT’S ALWAYS A GOOD IDEA TO SIT DOWN WITH AN EXPERT TO PLAN A DREAM HOME THAT’S WITHIN COMFORTABLE REACH.
“We’ve had a ton of success with people building their own homes,” Bart says. “There’s a lot of work involved, but for our members who are heavily embedded in the trades they do it and do it successfully.” No matter which type of builder mortgage is right for you, Bart recommends getting pre-approved and then setting aside a contingency fund — if you’re pre-approved for $400,000, for example, budget for a $350,000 home so you can cover unexpected costs. And it’s always a good idea to sit down with an expert to plan a dream home that’s within comfortable reach. “Getting really good financial advice is a key part to moving into any sort of transaction, but especially a builder mortgage where there can be many variables, and we would love to help with that.”
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60 Parade of Homes fall 2018
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