Prefabrication is more favorable financing conditions for building a house. Find out why!

Building a home is the biggest investment in most people’s lives. The costs of such an undertaking are a big challenge, and everyone would like to move into their own home as soon as possible. Fortunately, there are several good methods of obtaining funds, and among them the most popular is a mortgage loan. How do you get one? What is required? And is there a way to make it easier to get loans?

Various sources of funds for construction

A loan cannot be the only source of financing. An appropriate down payment is required (from 10% to even over 30%, depending on the property owned and the investor’s income situation). Before starting the formalities, it is worth doing some research on how much money you can get and how it will be obtained. The most commonly used funds are listed below.

– Your own cash. Savings are a reliable source of capital, but liquidating all savings is not advisable. Construction takes quite a long time and it is worth having something put aside just in case.
– Family help. Maybe a close or distant relative has larger savings and will want to help with the construction? In this case, you should remember about the gift tax, especially in the case of large amounts from distant family.
– Construction subsidies. Currently, the National Fund for Environmental Protection and Water Management runs the “clean air” program. Local governments can also run smaller subsidy programs. Even some banks have special offers for people who build energy-efficient houses (eco-credits).
– Selling an apartment. Owners of apartments can sell their current property to speed up the construction of a new one. If it was acquired within the last five years, however, you will be required to pay the appropriate tax on the profit from the transaction. This can only be avoided if the entire profit is allocated for housing purposes.
– Mortgage. A mortgage is a long-term obligation and is often the main source of financing. However, it requires meeting the appropriate conditions set by banking institutions.
– Additional loans and subsidies for pro-ecological solutions. In addition to subsidies specifically intended for building a house, there are also loans and subsidies available for, for example, installing photovoltaic panels or a heat pump. If the project includes such elements, this is a good way to obtain additional funds.

What is necessary to obtain a loan?

The first step in obtaining a loan is to prepare an appropriate cost estimate, which will allow the construction process to proceed without complications. The amount of the tranche paid must correspond to the amount of the construction costs of a given stage, so that there is no problem with settling it with the bank. In traditional construction, this is a difficult task due to price changes during construction (materials and contractors’ rates). There is also a risk that additional unforeseen costs will appear. This problem is largely solved by the construction of prefabricated houses – the price guarantee makes it easier to prepare an appropriate cost estimate.

The next step is to document to the bank that you have the required own contribution. If you already have a plot of land for development, its value is considered your own contribution, assuming that it is not already encumbered by a mortgage from another loan. If the investor already has his own apartment (not encumbered by a loan), but does not want to sell it, in some banks he can use it as your own contribution.

Whenever investors plan to use a loan for a planned construction project, we recommend contacting a financial expert who cooperates with us, who will individually and reliably verify the possibilities of financing the investment and answer any questions that may arise on this topic.

Dokumenty do przygotowania

Before the investor goes to the bank, they must prepare the appropriate documents.

– Documents specifying income (depending on the source of income and the bank, they can vary significantly).
– Extract and drawing from the land register, not older than 3 months.
– Printout from the Land and Mortgage Register.
– Certificate of the plot’s designation in the Local Spatial Development Plan and/or a decision on the conditions of development and land development.
– Validated building permit.
– Cost estimate on a bank form.
– Construction design.
– Construction log.

Real estate valuation, in which the property valuer estimates the current value of the property, approves the cost estimate and estimates the target value of the property that is to be used as collateral for the loan

Construction schedule

The received loan is usually divided into tranches and paid out in stages as construction work progresses. In order to receive the next part of the loan, it is necessary to document the use of the previous money in accordance with the agreement. That is why it is so important to properly prepare the cost estimate so that at each stage the financing covers the required scope of work (also taking into account unplanned costs). In our offer, we provide the purchase of materials and the construction team ourselves. Our clients are sure that the loan settlement will go according to plan. Each stage must also be assessed by the construction manager or inspector in terms of meeting the technical conditions for 2021.

The construction time is very important – during this time the loan is subject to a grace period for the repayment of capital. The investor pays interest on the disbursed amount of the loan, while the repayment of capital installments is suspended. The longer it takes to build a house, the more expensive our loan is in the final analysis.

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