When you’re building a home, a builder mortgage is the way to go. Specifically designed for new build projects, builder mortgages offer a wide array of options suited to the building process and all that it brings. There are five types of builder mortgages available at SCU.
Turn Key Mortgage
A Turn Key Mortgage is designed for homes being built and funded by the builder until possession date.
An Assumption Mortgage is similar to Turn Key Mortgages but it requires an initial deposit and is funded by the builder until possession date. This type of mortgage is available to certain builders only.
An Assumption Mortgage has several advantages:
- All appraisal and mortgage registration fees are waived
- There are some savings in legal, registration and documentation fees
- Extended rate guarantee is available (some conditions apply)
RTM (Ready to Move)
If you are building a ready-to-move home, this is the mortgage for you. There are two types of ready-to-move homes that fall into this category.
A transportable single or multiple section family dwelling that's ready for occupancy upon completion of set up.
A unit that is intended for residential use, constructed as a unit or component parts off site. It is transported to the job site as a finished unit or component parts that are assembled and placed on a proper foundation.
A Contract Build Mortgage is set up in stages. Funds are advanced when stages of the build are complete. The request for the funds at the end of these stages will be sent via fax or courier from your lawyer’s office. The mortgage at SCU is set up as an interest-only mortgage while construction takes place. Once you take possession you will resume principal and interest payments on the mortgage. You are only required to pay interest on the amount advanced on the mortgage.
A Self Build Mortgage does not follow a specific contract as typically you will be doing the majority of work yourself or contracting it out. Self builds usually take longer than a turn key or true contract build, therefore interest-only payments are usually set up for 12 months. The Self Build mortgage at SCU is set up as an interest only mortgage while construction takes place. Once you take possession you will resume principal and interest payments on the mortgage. You are only required to pay interest on the amount advanced on the mortgage. You are responsible to use your own funds for the down payment. After that, SCU will begin to advance on the mortgage. Typically with a self build there will be 5-6 progress advances.
Click here for more information to consider when choosing a partner to finance your build.